Shufersal (TASE:SAE) Net Profit Margin Jumps to 5%, Reinforcing Bullish Profitability Narrative

Shufersal (TASE:SAE) has just posted its Q3 2025 results, reporting revenue of ₪3.7 billion and basic EPS of ₪0.72. The company has seen revenue trend from ₪4.1 billion in Q3 2024 to ₪3.7 billion in Q3 2025, with EPS moving from ₪0.89 down to ₪0.72 over the same period. Investors will be watching closely as margins take center stage this quarter.

See our full analysis for Shufersal.

Now let's put these latest headline numbers in perspective and see how they measure up against the prevailing community and market narratives for Shufersal.

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Net Profit Margin Rises to 5%

• Net profit margin improved to 5% over the trailing twelve months, up from 2.8% a year ago. This reflects a notable expansion in core profitability.
• Market opinion sees this higher margin as a sign of operational improvement and supports the view that Shufersal’s recent profit momentum stands out among regional grocers.
  • This stronger margin is consistent with the 72.6% year-over-year earnings growth, which is also significantly higher than the company’s five-year average gain of 15.1%.
  • These changes add credibility to claims that Shufersal’s core business quality has strengthened, rather than benefiting solely from industry-wide trends.

Price-to-Earnings Remains Attractive

• The trailing twelve-month price-to-earnings (P/E) ratio is 13.9x, lower than both the peer average of 20x and the Asian Consumer Retailing industry’s 16.7x.
• The market view emphasizes that this discounted P/E suggests relative value. However, with shares trading at ₪39, well above the ₪25.70 DCF fair value, there is ongoing debate about how much future growth is already reflected in the price.
  • Some may view this as a bargain compared to other retailers, but the difference between the current price and DCF fair value keeps valuation concerns in focus.
  • Profit growth and margin improvement provide real support, but the premium to DCF highlights caution among value-oriented investors.

Same Store Sales Drop Raises Questions

• Same store sales growth turned negative with a decline of 8.7% in Q3 2025, following a drop of 8.1% in Q2 2025, after reported growth in previous quarters.
• Market watchers note that while bottom-line quality has improved, this ongoing sales contraction could pressure future performance if not reversed.
  • Decreasing same store sales can indicate competitive pressures or shifting consumer preferences, which may require renewed strategic focus.
  • Despite bottom-line gains, this sales trend could limit momentum if not stabilized in coming quarters.

See our latest analysis for Shufersal.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Shufersal's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

While Shufersal’s profit margins have improved, sliding same store sales and a valuation premium present concerns about future growth and value for investors.

Searching for better value and stronger price-to-fair-value opportunities? Discover options trading at more attractive levels by using these 920 undervalued stocks based on cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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