Gad Dairies: Sharp profit growth amid stock decline
The cheese manufacturer concluded the quarter with a 9.9% revenue increase, consolidated Meshek Weiler for the first time, and approved a 30 million shekel dividend. However, the entire sector is suffering from cooling investor appetite.
Gad Dairies, one of Israel's largest companies in the cheese and dairy products sector, published strong reports for the second quarter of 2026: revenue of approximately 210.1 million shekels and a 47% jump in net profit compared to the corresponding quarter. Nevertheless, the company's stock—which went public in September 2025—has lost over 20% from its peak recorded a few months ago, reflecting a broader trend cooling the entire food sector on the Tel Aviv Stock Exchange.
Growth and Consolidation
Revenue in the second quarter grew by 9.9% to 210.1 million shekels, compared to 191.1 million in the same period last year. Growth was driven by both retail and professional sectors, and supported by the initial consolidation of Meshek Weiler, which Gad acquired this year.
Gross profit climbed to approximately 64 million shekels, with its margin rising to 30.5% compared to 29.2% last year, an improvement the company attributes to lower raw material costs and a favorable euro exchange rate. Operating profit jumped by 36% to 23 million shekels, and EBITDA rose by 27% to 29.8 million shekels. Net profit reached 17.1 million shekels.
Strategy and Dividends
The board of directors approved a 30 million shekel dividend distribution, payable on September 23. Strategically, Gad is expanding into plant-based alternatives: on April 30, it completed the acquisition of 51% of Meshek Weiler for 42.8 million shekels. In late July, it launched the FEEL GAD brand, featuring 11 vegan products.
Since its IPO in September 2025, Gad's stock has risen by 17%, with a market value of approximately 1.29 billion shekels and a P/E ratio of about 27. However, the short-term outlook is less optimistic: the stock has fallen by over 20% from its early 2026 peak and has lost 3.9% so far this month.
This decline is not unique to Gad. The TA-Food index has lost about 18% since its May launch. Investors are concerned that growth in the sector has relied largely on price hikes rather than real quantitative expansion.
Amir Aharon, CEO of Gad Dairies, stated:
"We are concluding the second quarter with growth in revenue and all profit indicators. The good results were due to increased demand, improved raw material costs, and the shekel-euro exchange rate. The professional market has begun to recover following the impact of Operation 'Lion's Roar'. We continue to implement our long-term strategy for profitable growth, strengthening our activity in plant-based protein and alternative products, alongside the construction of our new factory in Timarim."
