Yochananof reports profit decline to 50 million shekels and a major real estate move
The chain managed by Eitan Yochananof recorded a 1.9% revenue decline and a 1.6% decrease in same-store sales in the second quarter, largely due to technical factors including the timing of Passover and the cessation of Zol Stock consolidation. Simultaneously, the board approved the spin-off of real estate assets worth approximately one billion shekels.
The supermarket chain Yochananof, managed by CEO Eitan Yochananof, concluded the second quarter of 2026 with a profit decline of approximately 9.6%, to 50 million shekels compared to 55 million shekels in the same quarter last year. Revenue for the quarter (excluding the accounting impact of consignment arrangements) decreased by about 1.9% to 1.3 billion shekels, and EBITDA contracted by about 2.8% to 140 million shekels.
Simultaneously with the publication of the reports, the board of directors approved a strategic move: the transfer of all real estate assets owned by the chain, worth about one billion shekels, to a dedicated subsidiary.
At first glance, the quarterly picture is negative: same-store sales, a metric that excludes the contribution of new branches, decreased by 1.6%. However, the main reason is technical — the timing of the Passover holiday, which fell in a different quarter this year and effectively "shifted" sales between periods.
A second factor is the cessation of the accounting consolidation of the Zol Stock chain from the end of 2025, which reduced consolidated revenue by about 37 million shekels. Excluding these two factors, the chain's core activity actually continued to grow: sales in the food sector rose by about 0.9% during the quarter, and new stores added about 31 million shekels.
An encouraging point for investors: the gross profit margin for the quarter even rose slightly to 20.4%, thanks to the timing of Passover and an improvement in trade terms with suppliers. The EBITDA margin remained high, at about 10.5% of revenue. In other words, even in a "weakened" quarter, the chain maintained one of the highest profit margins in the industry. Part of the decline in net profit was due to a one-time loss from the revaluation of a financial asset (shares and options of the company Z2A); when neutralized, the decrease in quarterly profit moderates to 4.5%.
The more significant move for the long term is not in the quarterly numbers but in the board's decision to concentrate real estate assets in a separate arm. Until now, the Yochananof structure was unusual in the industry, as real estate was embedded within the retail company, while Rami Levy and Shufersal had already separated it long ago.
According to the company's announcement, the move will allow for "focused management of the real estate arm, as well as superior financial and business flexibility." The transfer is subject to tax authority approvals, valuations, and the consent of the Israel Land Authority.
Yochananof stock is included in the TA-90 index, and therefore is held in the pension and training funds of many. The quarter should not necessarily be worrying, as it is mostly explained by timing and an accounting change. The big story is the separation of the real estate, which will allow analysts to price the chain according to two engines — retail and real estate — and may unlock value.
Eitan Yochananof has already said that he does not rule out an IPO of the real estate activity, and the precedent is Rami Levy Real Estate, which went public in April with a valuation of about 4.5 billion shekels. However, it is worth remembering: such an IPO has not yet been announced, the move is subject to approvals, and in similar IPOs in the past, a significant portion of the money flowed to the controlling shareholder and not to the development of the company.
Eitan Yochananof, CEO and co-owner of the Yochananof chain, stated:
"We are concluding the second quarter and the first half of the year with continued growth in Yochananof's core activity, which relies on sales growth, expansion of the footprint, and continuous improvement in results. We continue to strengthen the value proposition for the consumer and offer the most affordable shopping experience. Parallel to the retail activity, we have built in recent years a significant real estate activity, including investment real estate assets of about one billion shekels and the establishment of commercial and logistics projects supporting food retail all over the country. Against the background of its expansion, we decided to manage and develop it within a dedicated framework, which will allow for business focus and optimal utilization of the potential existing in the assets over time."
