The Numbers

Strauss Group (TASE: STRS) reported Q2-2026 EBIT of NIS 363 million, up 41.9% year-over-year, on revenues of NIS 2,867 million — down 1.9% on a like-for-like basis after stripping out foreign exchange translation effects. Net profit attributable to shareholders more than doubled to NIS 195 million, a 113.3% increase, while free cash flow swung from negative NIS 89 million in Q2-2025 to positive NIS 150 million. The net debt-to-EBITDA ratio improved to 1.5x from 2.4x a year earlier — a deleveraging pace that most multi-segment food and beverage groups would envy in the current rate environment.

For the first half of 2026, the picture is sharper still: group EBIT reached NIS 679 million, up 52.9%, with H1 net profit nearly doubling to NIS 376 million on a 119.3% increase. Credit rating agency Midroog maintained the group's Aa1.il rating with a stable outlook, and the company declared a semi-annual dividend of NIS 180 million.

Segment Intelligence

Coffee International was the standout unit. Q2 EBIT came in at NIS 148 million, up 44.3% — and up 59.5% excluding FX — despite a 13.1% revenue decline driven almost entirely by shekel strength and lower green coffee pass-through prices at the Brazilian joint venture 3corações. That margin expansion on falling revenue is an important signal: when commodity input costs drop, operators who have built pricing discipline capture the benefit faster than those who used peak costs as a pricing crutch. The H1 Coffee International EBIT margin expanded from 5.4% to 10.5% — a 510-basis-point improvement that reflects both commodity tailwinds and operational leverage.

Strauss Israel's Snacks & Confectionery segment flipped from near break-even in Q2-2025 to an EBIT of NIS 52 million in Q2-2026, even accounting for NIS 27 million in one-time insurance income. Stripping that out, the underlying margin still moved from effectively zero to 8.2% — a recovery worth watching for operators in the confectionery and salty-snack supply chain. Health & Wellness, the group's largest Israeli segment by revenue at NIS 804 million in Q2, held margins steady near 14.6%, demonstrating category resilience even without volume growth.

Strauss Water posted Q2 revenue growth of 7.1% with an 11.8% EBIT margin, though the H1 picture is murkier: a 13.9% EBIT decline in the first half reflects ongoing operational disruption from the war in Israel affecting Q1 performance. The China-based Haier Strauss Water joint venture also showed volume improvement on a local-currency basis despite reported revenue declines from FX translation.

What Operators Should Watch

The Strauss results offer a practical benchmark for any operator or supplier navigating a period of FX-driven revenue compression. The group's ability to expand gross margin from 28.3% to 34.4% in a single quarter — while holding capex discipline (net capex fell 17.9% to NIS 115 million) — illustrates how portfolio diversification across geographies and categories can buffer top-line softness. For procurement teams sourcing coffee or cocoa, the 3corações volume growth in roast-and-ground despite lower average selling prices suggests category demand is holding even as traders reprice on green coffee movement.

The divestiture of the Coffee-To-Go retail chain (Elite Coffee stores) also deserves attention from brand operators considering channel exits: Coffee Israel's EBIT margin expanded to 15.4% in Q2 partly because the drag from lower-margin retail operations was removed. Simplifying a portfolio to protect margin is a strategic move more operators are executing in 2025-2026, and Strauss provides a clean data point on what that can yield.

For vendors and suppliers tracking procurement signals, Strauss's continued investment in brands and innovation — called out explicitly by President and CEO Shai Babad — suggests the group is not in cost-only mode. That means RFPs for packaging, ingredients, and foodservice equipment tied to innovation pipelines are likely to remain active through the back half of 2026.

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.