Rosh Ha'Ayin, Israel, November 21 - Blue Square-Israel Ltd. today announced results for the third quarter and nine months ended September 30, 2007. All financial results are reported according to Israeli GAAP (Generally Accepted Accounting Principles).
Further to its announcement dated August 13, 2007, during the third quarter the Company launched its "Mega In Town" format designed to bring discount shopping to neighborhoods. The initiative included the conversion of 104 existing SuperCenter and Mega stores to the new brand, together with a major media campaign. As a result, the Company recognized growth in sales in "Mega In Town" stores, along with an increase in SG&A Expenses associated with the launch.
Results for the Third Quarter
Revenues: Revenues for the third quarter of 2007 increased by 6.6% to NIS 1,823.5 million (U.S. $454.4 million)(a) compared with NIS 1,710.2 million in the third quarter of 2006. The increase reflects additional selling space resulting from the opening of eight new stores during the previous year, and the ongoing expansion of operations of Bee Group Retail (formerly Kfar Ha'Shaashuim), including the consolidation of initial revenues of Vardinon Textile Ltd. ("Vardinon"), 85.8% of which the Company acquired in Q2.
Gross Profit: Gross profit for the third quarter of 2007 increased by 7.5% to NIS 480.2 million (U.S. $119.7 million) compared to NIS 446.5 million in the third quarter of 2006. This reflects improved agreements with suppliers and higher profitability onsales generated by the Company's subsidiary Bee Group Retail, moderated by a strongly competitive environment and the impact from the launch of the Mega In Town chain which increased the proportion of discount sales in the revenue mix. Gross margin for the period increased to 26.3% from 26.1% in the third quarter of 2006.