ACE HARDWARE REPORTS SECOND QUARTER 2025 RESULTS
- Record second quarter revenues of $2.8 billion, an increase of 3.9 percent
- Online sales increased 18.1 percent from the second quarter of 2024
- Second quarter net income of $119.1 million, an increase of 4.1 percent
OAK BROOK, Ill., Aug. 27, 2025 /PRNewswire/ -- Ace Hardware Corporation ("Ace" or the "Company") today reported second quarter 2025 revenues of $2.8 billion, an increase of $105.8 million, or 3.9 percent, from the second quarter of 2024. Net income was $119.1 million for the second quarter of 2025, an increase of $4.7 million from the second quarter of 2024.
"In a macro-environment that has confounded and humbled even the best retailers, I'm delighted to report a 3.9 percent increase in revenue, a 4.1 percent jump in net income, and an 18.1 percent surge in our digital business," said John Venhuizen, President and CEO. "I'd like to thank the Ace team for serving with dignity, decency, character, and class. They really do make Ace the helpful place."
The approximately 4,000 Ace retailers who share daily retail sales data reported a 0.8 percent decrease in U.S. retail same-store-sales during the second quarter of 2025, which was the result of a 2.1 percent decrease in same-store transactions; partially offset by a 1.3 percent increase in average ticket. Excluding lumber and building material stores, Ace stores in the traditional hardware format experienced a 0.4 percent decline in same-store-sales.
Revenues
Consolidated revenues for the quarter ended June 28, 2025 totaled $2.8 billion. Total wholesale revenues were $2.5 billion, an increase of $89.7 million, or 3.7 percent, as compared to the prior year second quarter. Increases were seen across most departments with lawn and garden, grilling, impulse, and outdoor power equipment showing the largest gains.
Wholesale merchandise revenues to new domestic Ace stores activated from January 2024 through June 2025 contributed $69.9 million of incremental revenues during the second quarter of 2025, while wholesale merchandise revenues decreased $10.9 million during the second quarter due to domestic Ace stores whose memberships were cancelled. Wholesale merchandise revenues to comparable domestic Ace stores decreased $5.9 million for the quarter. Ace Wholesale Holdings reported a $24.9 million increase in wholesale revenues, or 18.9 percent, from the second quarter of 2024 due to new customers. Ace International Hardware ("AIH") experienced a $12.6 million decrease in wholesale revenue from the second quarter of 2024, primarily due to the loss of what had been AIH's largest customer. Ace Services Holdings, which is reported as part of the Company's wholesale business, experienced a $3.5 million increase in revenues from the second quarter of 2024.
Total retail revenues from Ace Retail Holdings ("ARH") for the quarter were $274.8 million, an increase of $16.1 million, or 6.2 percent, as compared to the prior year second quarter. The Great Lakes Ace Hardware chain experienced a 1.1 percent decrease in same-store-sales while the Westlake Ace Hardware chain experienced a 0.5 percent decrease in same-store-sales in the quarter. The new stores opened by ARH since the end of the first quarter of 2024 contributed $21.4 million of incremental revenues during the second quarter of 2025. ARH operated 261 stores at the end of the second quarter of 2025 compared to 240 stores at the end of the second quarter of 2024.
Ace added 38 new domestic stores in the second quarter of 2025 and cancelled 20 stores. This brought the Company's total domestic store count to 5,195 at the end of the second quarter of 2025, an increase of 111 stores from the second quarter of 2024.
Gross Profit
Wholesale gross profit for the quarter ended June 28, 2025 was $362.6 million, an increase of $27.0 million from the second quarter of 2024. The wholesale gross margin percentage was 14.2 percent of wholesale revenues in the second quarter of 2025, up from 13.7 percent in the second quarter of 2024. The increase in gross margin percentage was planned and was the result of product cost inflation being passed through to customers.
Retail gross profit for the quarter ended June 28, 2025 was $119.1 million, an increase of $7.3 million from the second quarter of 2024. The retail gross margin percentage was 43.3 percent of retail revenues in the second quarter of 2025, up slightly from 43.2 percent in the second quarter of 2024. For ARH, retail gross profit is based on the Company's wholesale acquisition cost of product, not ARH's acquisition cost which includes a markup from the Company.
Expenses and Other
Wholesale operating expenses increased $29.1 million, or 11.6 percent, from the second quarter of 2024. The increase is primarily driven by planned increases in marketing, advertising and supply chain spending, and higher compensation benefit expenses. As a percentage of wholesale revenues, wholesale operating expenses increased to 11.0 percent of wholesale revenues in the second quarter of 2025 from 10.3 percent of wholesale revenues in the second quarter of 2024.
Retail operating expenses increased $5.8 million, or 7.7 percent, from the second quarter of 2024. The increase was driven by expenses related to the new stores added since the end of the first quarter of 2024. Retail operating expenses as a percentage of retail revenue increased to 29.4 percent in the second quarter of 2025 from 29.0 percent in the second quarter of 2024.
Interest expense increased $2.6 million from the second quarter of 2024 due to higher average borrowings.
Other income, net increased $4.6 million from the second quarter of 2024 primarily due to gains on long-term investments.
Recent tariffs imposed by the U.S. on companies worldwide will increase the Company's cost of goods. The Company intends to pass these increased costs through to its customers and expects that its customers will pass these increased costs through to consumers. 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.
Balance Sheet and Cash Flow
Receivables increased $28.2 million from the second quarter of 2024 due to higher sales volumes.
Inventories increased $81.9 million from the second quarter of 2024 driven by higher sales volumes and ARH new store inventory.
Long-term debt, including current maturities, increased $148.6 million from the second quarter of 2024. At the end of the second quarter of 2025, long-term debt consisted of $385.5 million outstanding on the revolving credit facility, $49.4 million outstanding on the ARH credit facility and $51.5 million owed to former retailers.
About Ace Hardware
Ace Hardware is the largest hardware cooperative in the world, serving more than 8,700 locally owned and operated stores around the globe, while providing the best products, services, and operating methods to almost 5,200 Ace retail stores in the United States. Ace Hardware's family of brands includes Ace Hardware, Emery Jensen Distribution, and independent retailers worldwide. Headquartered in Oak Brook, Ill., Ace operates an expansive network of U.S. distribution centers, along with international capabilities in Ningbo, China, and Cuautitlán Izcalli, Mexico. Since 1924, Ace has been a part of local communities, known as the place with the helpful hardware folks. For more information, visit acehardware.com or newsroom.acehardware.com.
Contacts:
Shareholders'/Investors' Inquiries:
William Guzik, Executive Vice President, Chief Financial Officer & Chief Risk Officer
630-990-3325, [email protected]
Media Inquiries:
Jeff Gooding, Vice President, Consumer Marketing
630-990-3600, [email protected]
ACE HARDWARE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 28, | June 29, | June 28, | June 29, | ||||||
2025 | 2024 | 2025 | 2024 | ||||||
(13 Weeks) | (13 Weeks) | (26 Weeks) | (26 Weeks) | ||||||
Revenues: | |||||||||
Wholesale revenues | $ 2,545.3 | $ 2,455.6 | $ 4,597.3 | $ 4,432.5 | |||||
Retail revenues | 274.8 | 258.7 | 450.0 | 419.6 | |||||
Total revenues | 2,820.1 | 2,714.3 | 5,047.3 | 4,852.1 | |||||
Cost of revenues: | |||||||||
Wholesale cost of revenues | 2,182.7 | 2,120.0 | 3,971.5 | 3,842.6 | |||||
Retail cost of revenues | 155.7 | 146.9 | 246.9 | 232.1 | |||||
Total cost of revenues | 2,338.4 | 2,266.9 | 4,218.4 | 4,074.7 | |||||
Gross profit: | |||||||||
Wholesale gross profit | 362.6 | 335.6 | 625.8 | 589.9 | |||||
Retail gross profit | 119.1 | 111.8 | 203.1 | 187.5 | |||||
Total gross profit | 481.7 | 447.4 | 828.9 | 777.4 | |||||
Wholesale operating expenses: | |||||||||
Distribution operations expenses | 79.4 | 71.5 | 152.2 | 140.4 | |||||
Selling, general and administrative expenses | 91.2 | 83.7 | 180.7 | 167.8 | |||||
Retailer success and development expenses | 110.2 | 96.5 | 174.2 | 146.1 | |||||
Retail operating expenses | 80.8 | 75.0 | 160.9 | 146.7 | |||||
Retail pre-opening expenses | (0.3) | 2.1 | 0.9 | 2.7 | |||||
Total operating expenses | 361.3 | 328.8 | 668.9 | 603.7 | |||||
Operating income | 120.4 | 118.6 | 160.0 | 173.7 | |||||
Interest expense | (14.7) | (12.1) | (28.0) | (24.3) | |||||
Interest income | 1.5 | 1.4 | 3.3 | 3.3 | |||||
Other income, net | 10.7 | 6.1 | 12.6 | 8.3 | |||||
Income tax benefit | 1.2 | 0.4 | 1.5 | 0.3 | |||||
Net income | 119.1 | 114.4 | 149.4 | 161.3 | |||||
Less: net loss attributable to noncontrolling interests | (0.4) | (0.4) | (0.8) | (0.7) | |||||
Net income attributable to Ace Hardware Corporation | $ 119.5 | $ 114.8 | $ 150.2 | $ 162.0 | |||||
Patronage distributions accrued | $ 110.5 | $ 109.3 | $ 172.1 | $ 185.8 | |||||
Patronage distributions accrued for third party Retailers | $ 105.4 | $ 103.9 | $ 162.1 | $ 175.8 | |||||
ACE HARDWARE CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except share data) | |||||
June 28, | December 28, | June 29, | |||
2025 | 2024 | 2024 | |||
Assets | (Unaudited) | (Audited) | (Unaudited) | ||
Cash and cash equivalents | $ 40.9 | $ 36.3 | $ 40.0 | ||
Marketable securities | 44.6 | 42.7 | 51.2 | ||
Receivables, net of allowance for doubtful accounts of $12.5, $10.9 | 941.7 | 727.8 | 913.5 | ||
Inventories | 1,395.0 | 1,197.9 | 1,313.1 | ||
Prepaid expenses and other current assets | 98.5 | 87.3 | 79.7 | ||
Total current assets | 2,520.7 | 2,092.0 | 2,397.5 | ||
Property and equipment, net | 624.6 | 594.6 | 568.7 | ||
Operating lease right-of-use assets, net | 777.5 | 798.2 | 801.0 | ||
Finance lease right-of-use assets, net | 167.2 | 185.7 | 120.3 | ||
Goodwill and other intangible assets, net | 461.6 | 455.6 | 430.3 | ||
Other assets | 192.0 | 166.7 | 172.1 | ||
Total assets | $ 4,743.6 | $ 4,292.8 | $ 4,489.9 | ||
Liabilities and Equity | |||||
Current maturities of long-term debt | $ 71.4 | $ 80.6 | $ 49.2 | ||
Accounts payable | 1,588.5 | 1,215.2 | 1,589.1 | ||
Patronage distributions payable in cash | 66.6 | 137.2 | 71.9 | ||
Patronage refund certificates payable | 15.0 | 15.0 | 29.0 | ||
Current operating lease liabilities | 117.6 | 94.4 | 88.6 | ||
Current finance lease liabilities | 45.2 | 37.9 | 27.5 | ||
Accrued expenses | 294.1 | 313.1 | 275.9 | ||
Total current liabilities | 2,198.4 | 1,893.4 | 2,131.2 | ||
Long-term debt | 415.0 | 246.5 | 288.6 | ||
Patronage refund certificates payable | 234.9 | 205.8 | 182.7 | ||
Long-term operating lease liabilities | 688.2 | 728.4 | 730.4 | ||
Long-term finance lease liabilities | 120.2 | 145.0 | 94.8 | ||
Other long-term liabilities | 168.3 | 151.8 | 138.7 | ||
Total liabilities | 3,825.0 | 3,370.9 | 3,566.4 | ||
Member Retailers' Equity: | |||||
Class A voting common stock, $1,000 par value, 10,000 shares | 2.6 | 2.6 | 2.6 | ||
Class C nonvoting common stock, $100 par value, 20,000,000 shares | 804.0 | 752.9 | 783.2 | ||
Class C nonvoting common stock, $100 par value, issuable to retailers | 39.1 | 82.5 | 46.5 | ||
Contributed capital | 19.2 | 19.3 | 19.1 | ||
Retained earnings | 47.1 | 58.5 | 65.2 | ||
Accumulated other comprehensive loss | (0.8) | (1.9) | (0.9) | ||
Equity attributable to Ace member retailers | 911.2 | 913.9 | 915.7 | ||
Equity attributable to noncontrolling interests | 7.4 | 8.0 | 7.8 | ||
Total equity | 918.6 | 921.9 | 923.5 | ||
Total liabilities and equity | $ 4,743.6 | $ 4,292.8 | $ 4,489.9 | ||
ACE HARDWARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions) | |||
Six Months Ended | |||
June 28, | June 29, | ||
2025 | 2024 | ||
(26 Weeks) | (26 Weeks) | ||
Operating Activities | |||
Net income | $ 149.4 | $ 161.3 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 50.2 | 48.5 | |
Non cash lease expense | 22.2 | 14.9 | |
Amortization of deferred financing costs | 0.5 | 0.5 | |
Loss on the disposal of assets, net | - | 0.4 | |
Provision for doubtful accounts | 2.4 | 0.9 | |
Other, net | 4.0 | (6.0) | |
Changes in operating assets and liabilities, exclusive of effects of acquisitions: | |||
Receivables | (259.8) | (266.8) | |
Inventories | (195.9) | (75.2) | |
Other current assets | (11.2) | (9.9) | |
Other long-term assets | (2.3) | (12.8) | |
Accounts payable and accrued expenses | 374.6 | 516.9 | |
Other long-term liabilities | 16.2 | 14.4 | |
Deferred taxes | (0.2) | (1.0) | |
Net cash provided by operating activities | 150.1 | 386.1 | |
Investing Activities | |||
Purchases of investment securities | (9.6) | (16.9) | |
Proceeds from sale of investment securities | 5.7 | 14.5 | |
Purchases of property and equipment | (74.0) | (76.7) | |
Cash paid for acquired businesses, net of cash acquired | (8.2) | (18.6) | |
Increase in notes receivable, net | (13.7) | (18.2) | |
Proceeds from sale of assets | 0.1 | 0.6 | |
Other, net | (0.4) | 0.1 | |
Net cash used in investing activities | (100.1) | (115.2) | |
Financing Activities | |||
Net borrowings (payments) under revolving lines of credit | 158.4 | (70.8) | |
Principal payments on long-term debt | (10.4) | (9.4) | |
Principal portion of finance lease payments | (23.9) | (16.7) | |
Payments of cash portion of patronage distribution | (137.8) | (137.1) | |
Payments of patronage refund certificates | (28.8) | (22.8) | |
Repurchase of stock | (4.5) | (6.2) | |
Purchase of noncontrolling interests | (0.3) | (0.5) | |
Other, net | 1.9 | 0.7 | |
Net cash used in by financing activities | (45.4) | (262.8) | |
Increase in cash and cash equivalents | 4.6 | 8.1 | |
Cash and cash equivalents at beginning of period | 36.3 | 31.9 | |
Cash and cash equivalents at end of period | $ 40.9 | $ 40.0 | |
Supplemental disclosure of cash flow information: | |||
Interest paid | $ 25.1 | $ 22.7 | |
Income taxes paid | $ 1.3 | $ 2.3 | |
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SOURCE Ace Hardware Corporation
