Harel Wiesel smiles: The company that doubled its profit to 14 million shekels

Terminal X, the online commerce arm of the Fox-Wiesel fashion group controlled by Harel Wiesel, published its results for the second quarter of 2026. The company presented a strong quarter: revenues grew by about 20.5% to about 161.1 million shekels, net profit almost doubled to about 13.7 million shekels, and the company announced a dividend distribution of about 20 million shekels to shareholders. According to the company, this is the 12th consecutive quarter in which it has presented double-digit growth alongside an expansion of operating profit.

The number that catches the eye is not necessarily the core. The activity of the Terminal X website itself grew during the quarter by about 9.5% to about 124.2 million shekels. But the second segment, independent brands, was what provided the surge: its revenues jumped by about 77% to about 37.3 million shekels, and the operating profit (before share-based payment) in the segment jumped by about 315% to about 6.5 million shekels. The operating profit margin there rose from only 7.4% last year to about 17.4% - meaning, not only did the segment grow, it also became significantly more profitable.

What is behind the jump? Part of the growth is "organic" - more visits, more transactions, more active customers - but a significant part comes from acquisitions: the brands Inker and Ronit Yam, which were consolidated into the reports during the last year. In other words, Terminal X is buying growth, not just generating it, and this is a strategy worth following in the future.

Quarterly gross profit grew by about 24.4% to about 80.7 million shekels, and its rate rose to about 50.1%. Cash flow from current operations improved dramatically to about 10 million shekels for the quarter, and the adjusted EBITDA rose by about 42% to about 31.6 million shekels. Equity stands at about 290.6 million shekels - about 48.8% of the balance sheet - with net short-term financial balances of about 63.3 million shekels.

And yet, a point that requires attention: the average basket decreased. The average order amount for the quarter fell to about 427 shekels, compared to about 429 shekels last year. The decrease is small, but it shows that the growth in sales is driven by quantity - more transactions (about 495 thousand per quarter) and more active customers (about 785 thousand) - and not by raising prices or increasing the individual purchase.

Terminal X is not a completely independent company. Fox-Wiesel has controlled it since 2017, and in August the general assembly approved a three-year extension of a series of agreements between the two - services, management, brands, and the "Dream Card" customer club. These agreements create an inherent operational dependency: personnel costs loaded from Fox, for example, are rising from about 85 thousand shekels per month to about 131 thousand shekels. This is not necessarily a problem, but it is important for an investor to understand that the company's profitability is intertwined with the relationship with the controlling shareholder.

In the background, there is also a series of requests for class action lawsuits - on issues such as price display, website accessibility, and tracking "pixels" in emails. According to the company's legal advisors, it is more likely that most of them will end without being approved as class actions and for immaterial amounts, but this is ongoing legal noise that characterizes the online commerce industry.

After the balance sheet date, the company continued the expansion process and acquired 51% of the modest fashion brand Sde Bar for about 3.5 million shekels. The combination of consistent growth, improvement in profitability, current dividends, and focused acquisitions makes Terminal X one of the prominent retail stocks in Tel Aviv. The question is whether the pace of acquisitions will continue to be translated into profit - or whether at some stage growth will have to come from within again.

Nir Horowitz, CEO of Terminal X, said:

"We are summarizing the second quarter and the first half of 2026, with double-digit growth rates, and with a 12th consecutive quarter of profit improvement. The continuous improvement in indicators, both in Terminal X activity and in independent brands, reflects the implementation of the company's growth strategy. Acquiring companies with high growth potential alongside strengthening organic activity supports the continued improvement in the group's profitability and its leading position in the fashion and lifestyle field in Israel. The acquisition of the Sde Bar brand, which was completed recently, is another layer in this strategy and expands the group's brand portfolio and its activity in the Israeli market. We will continue to work on expanding categories, developing online capabilities, and examining entry into additional lifestyle categories, to increase the value we offer to consumers."