Max Stock Ltd: Q3 2024 Earnings Call - Revenue Surge Amid Expansion and Holiday Shifts

Max Stock Ltd (XTAE:MAXO) recently reported strong Q3 2024 earnings, with revenue up 18.6% year-over-year (YoY) to ILS 373.1 million. This growth was driven by strategic expansion, including the opening of new branches that added 6,000 net square meters of selling space, and a 9.2% increase in comparable store sales. The company's gross margin and adjusted earnings per share (EPS) also saw significant improvements, increasing to 41.3% and ILS 0.22, respectively.

Max Stock's comparable store sales growth was fueled by an increase in store traffic and higher conversion rates, particularly for seasonal items. Despite a shift in the Jewish New Year holiday timing, which negatively impacted October 2023 sales, the company's operational efficiency and customer focus led to robust financial performance in Q3 2024.

The company's branch expansion contributed to an increase in selling, general, and administrative expenses as a percentage of sales. However, this increase was offset by operating leverage, as Max Stock's revenue growth outpaced the incremental expenses from new branches. This resulted in a 120 basis point decrease in SGA expenses as a percentage of sales, from 27.8% in Q3 2023 to 26.6% in Q3 2024.

Max Stock's strong Q3 2024 performance, driven by revenue growth and improved operational efficiency, showcases the company's ability to adapt to market changes and capitalize on consumer preferences. The company's focus on expansion, customer experience, and value-oriented offerings has positioned it well to capitalize on emerging opportunities in the retail sector.