Strauss Group Q2 Net Profit Doubles as Coffee, Snacks Margins Surge

Israeli food and beverage conglomerate Strauss Group posted a sharp profitability turnaround in the second quarter of 2026, with net income attributable to shareholders more than doubling to NIS 195 million — up 113.3% versus NIS 90 million in Q2-2025 — even as reported revenues dipped 6.7% to NIS 2,867 million on shekel-strength headwinds. Strip out currency translation effects and the like-for-like revenue decline narrows to just 1.9%, signaling that underlying volume and mix trends held firmer than the headline suggests.

The Margin Story

The standout number is EBIT, which climbed 41.9% to NIS 363 million and pushed the operating margin from 8.3% to 12.6% year-over-year. Even excluding a one-time NIS 27 million insurance recovery booked in the quarter, EBIT reached NIS 336 million at an 11.7% margin — still a meaningful structural improvement. Gross margin widened to 34.4% from 28.3% in the same period last year, reflecting better commodity cost positioning and favorable category mix. Free cash flow swung from negative NIS 89 million in Q2-2025 to positive NIS 150 million, while the net debt-to-EBITDA ratio improved to 1.5x from 2.4x. Credit agency Midroog maintained the group's Aa1.il rating with a stable outlook, consistent with the deleveraging trajectory.

For the first half of 2026, results were equally constructive: group EBIT rose 52.9% to NIS 679 million on NIS 5,868 million in revenues, and H1 net profit nearly doubled to NIS 376 million, up 119.3%.

Segment Breakdown

The Coffee International division — which includes a 50% stake in Brazilian joint venture 3corações alongside the São Miguel Group — was a key profit driver. Q2 EBIT jumped 44.3% to NIS 148 million at an 11.1% margin despite a 13.1% revenue decline caused by shekel appreciation and lower green coffee pass-through prices in Brazil. On a like-for-like basis the revenue shortfall was a more modest 3.9%, and volume growth in the roast-and-ground segment partially offset pricing pressure. The Central and Eastern Europe coffee operations — covering Poland, Romania, Russia, and Ukraine — grew LFL revenues 6.4% in Q2.

Strauss Israel delivered Q2 EBIT of NIS 198 million, up 46%, with the margin expanding to 15.2% from 10.2%. The snacks and confectionery sub-segment was a standout: Q2 EBIT of NIS 52 million compared with near-breakeven a year ago, with H1 swinging from a NIS 15 million operating loss to NIS 92 million profit. The health and wellness portfolio posted steady Q2 EBIT growth of 4.3% to NIS 117 million. Coffee Israel revenues declined 11.1% in the quarter, though 8 percentage points of that drop trace to the previously divested Coffee-To-Go retail chain; on a comparable basis the contraction was 3.1% with EBIT up 35.0%.

Strauss Water, the group's dispensed-water appliance business, grew Q2 revenues 7.1% to NIS 233 million. The Haier Strauss Water joint venture — a 49%-owned venture with Haier serving the China market — posted Q2 revenues down 9.8% as reported but up 2.6% on a LFL basis, with profitability pressured by prior-period war-related costs in Israel weighing on H1 comparisons.

CEO Shai Babad attributed the results to operational discipline rather than one-time effects, calling the improvement "the result of a clear path, disciplined execution and focus on activities in which we have a real advantage." The board declared a semi-annual dividend of NIS 180 million, or approximately NIS 1.54 per share, payable September 3, 2026.

For food and beverage manufacturers supplying global retailers and convenience channel operators, Strauss's margin recovery underscores how cost discipline and category mix — particularly in coffee and snack formats — can offset volume softness. The group's coffee business spans both branded retail and foodservice-adjacent channels, making its commodity cost management relevant context for operators tracking dispensed beverage and packaged coffee trends across the c-store tier.

Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.