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Investing.com -- Strauss Group (TASE:STRS) reported first-quarter 2025 revenue of approximately NIS 3 billion, marking a 15.5% year-on-year increase.
The growth was largely driven by its international coffee operations—particularly in Brazil—alongside continued momentum in Israel and Strauss Water. Several business segments also recorded volume gains.
Organic growth for the quarter reached 20.9%, compared to 13.8% in the previous quarter. Operating profit came in at NIS 181 million, with a margin of 6.0%, slightly down from 6.1% in Q4. The company cited rising raw material costs, especially green coffee and cocoa, as key pressures on profitability.
Strauss shares fell more than 3% after the report.
Net profit stood at NIS 73 million, representing 2.4% of sales. Gross profit was notably affected by a non-recurring NIS 49 million loss on cocoa derivatives. Adjusted for that impact, gross profit would have totaled NIS 830 million, with a margin of 27.7%.
Sales growth was led by the coffee segment, with Israel Coffee rising 19% and International Coffee—Strauss’s largest segment at 45% of total sales—jumping 65%, primarily due to pricing initiatives.
According to broker Jefferies, the year-over-year decline in operating margins comes "due to higher input inflation in cocoa and coffee, including realisation of a non-recurring loss of NIS 49 million on cocoa derivatives."
"The results are reassuring as the company navigates through raw material inflation," analyst Feng Zhang added.