Ace Hardware’s digital and retail expansion lifted first-quarter revenues to a record $2.2 billion, up 4.2 per cent from the same period last year.
The company added 45 new domestic stores in the quarter, while its e-commerce business grew 35 per cent, helping offset softness in same-store sales.
However, despite the revenue growth, the hardware chain’s net income fell to $30.3 million, down $16.6 million from a year prior. The company attributed the decline to increased marketing budgets and supply chain infrastructure, along with the timing of vendor income.
Wholesale revenues rose 3.8 per cent year-over-year to $2.1 billion, with strong performance in lawn and garden, outdoor power equipment, and grilling.
New store additions accounted for $66.8 million in incremental revenue, while comparable store sales declined by $42.6 million.
Meanwhile, Ace Wholesale Holdings posted a 32.4 per cent increase in wholesale revenue, while Ace International Hardware reported a $6 million decline.
Retail revenue from Ace Retail Holdings rose 8.9 per cent to $175.2 million, supported by recent store openings. The company ended the quarter with 5177 domestic stores, up by 112 from last year.
Gross profit rose across both wholesale and retail segments. Wholesale gross profit was $263.2 million, while retail gross profit rose to $84 million, up from $75.7 million last year. Retail gross margin improved to 47.9 per cent from 47.0 per cent.
Operating expenses also increased. Wholesale operating expenses rose 11.7 per cent to $226.7 million, mainly due to higher marketing, compensation, and support centre costs.
Retail operating expenses were up 11.7 per cent to $80.1 million, reflecting the costs of operating newly added stores.
Looking ahead, Ace Hardware expects recent US tariffs to increase product costs but plans to pass these on to customers.
“At this time, the company is unable to determine the impact that this will have on the company’s revenues, results of operations and financial condition,” it said.
Ace Hardware is one of the world’s largest hardware cooperatives, supporting more than 8700 locally owned and operated stores worldwide.
