Ace Hardware Reports First Quarter 2025 Results

Record first quarter revenues of $2.2 billion, an increase of 4.2 percent

First quarter net income of $30.3 million

Accrued patronage dividend to shareholders of $61.6 million

Ranked #1 in home improvement on Forbes’ 2025 Best Customer Service List

Ranked the #5 best franchise in the world according to Entrepreneur Magazine

Ace Hardware Corporation (“Ace” or the “Company”) reported first quarter 2025 revenues of $2.2 billion, an increase of $89.4 million, or 4.2 percent, from the first quarter of 2024.  Net income was $30.3 million for the first quarter of 2025, a decrease of $16.6 million from the first quarter of 2024.  This decrease was largely expected based upon the timing of income earned from vendors as well as planned increases in marketing spend and investments in supply chain infrastructure.

“A 35 percent increase in our digital business, 0.6 percent same-store-sales growth from stores in the hardware format, and 45 new domestic stores highlighted our record first quarter revenue,” said John Venhuizen, President and CEO.

The approximately 3,900 Ace retailers who share daily retail sales data reported flat U.S. retail same-store-sales during the first quarter of 2025, which was the result of a 1.1 percent increase in average ticket; offset by a 1.1 percent decrease in same-store transactions. 

Revenues

Consolidated revenues for the quarter ended March 29, 2025 totaled $2.2 billion.  Total wholesale revenues were $2.1 billion, an increase of $75.1 million, or 3.8 percent, as compared to the prior year first quarter.  Increases were seen across many departments with lawn and garden, outdoor power equipment and grilling showing the largest gains. 

Wholesale merchandise revenues to new domestic Ace stores activated from January 2024 through March 2025 contributed $66.8 million of incremental revenues during the first quarter of 2025, while wholesale merchandise revenues decreased $7.8 million during the first quarter due to domestic Ace stores whose memberships were cancelled.  Wholesale merchandise revenues to comparable domestic Ace stores decreased $42.6 million for the quarter.  Ace Wholesale Holdings reported a $31.6 million increase in wholesale revenues, or 32.4 percent, from the first quarter of 2024.  Increases were seen across all channels with hardware showing the largest gain.  Ace International Hardware experienced a $6.0 million decrease in wholesale revenue from the first quarter of 2024 while Ace Services Holdings, which is reported as part of the Company’s wholesale business, experienced a $3.3 million increase in revenues from the first quarter of 2024. 

Total retail revenues from Ace Retail Holdings (“ARH”) for the quarter were $175.2 million, an increase of $14.3 million, or 8.9 percent, as compared to the prior year first quarter.  The Great Lakes Ace Hardware chain experienced a 3.7 percent increase in same-store-sales while the Westlake Ace Hardware chain experienced a 1.2 percent decrease in same-store-sales in the quarter.  The new stores opened by ARH since the end of 2023 contributed $14.5 million of incremental revenues during the first quarter of 2025.  ARH operated 258 stores at the end of the first quarter of 2025 compared to 236 stores at the end of the first quarter of 2024.

Ace added 45 new domestic stores in the first quarter of 2025 and cancelled 12 stores.  This brought the Company’s total domestic store count to 5,177 at the end of the first quarter of 2025, an increase of 112 stores from the first quarter of 2024. 

Gross Profit

Wholesale gross profit for the quarter ended March 29, 2025 was $263.2 million, an increase of $8.9 million from the first quarter of 2024.  The wholesale gross margin percentage was 12.8 percent of wholesale revenues in the first quarter of 2025, down slightly from 12.9 percent in the first quarter of 2024, due to the timing of income earned from vendors. 

Retail gross profit for the quarter ended March 29, 2025 was $84.0 million, an increase of $8.3 million from the first quarter of 2024.  The retail gross margin percentage was 47.9 percent of retail revenues in the first quarter of 2025, up from 47.0 percent in the first 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 $23.7 million, or 11.7 percent, from the first quarter of 2024.  The increase is primarily driven by increased marketing and advertising spending, higher compensation benefit expense and increased Retail Support Center related costs.  As a percentage of wholesale revenues, wholesale operating expenses increased to 11.0 percent of wholesale revenues in the first quarter of 2025 from 10.2 percent of wholesale revenues in the first quarter of 2024.

Retail operating expenses increased $8.4 million, or 11.7 percent, from the first quarter of 2024.  The increase was driven by expenses incurred related to the new stores added since the end of 2023.  Retail operating expenses as a percentage of retail revenue increased to 45.7 percent in the first quarter of 2025 from 44.6 percent in the first quarter of 2024. 

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 $21.9 million from the first quarter of 2024 due to higher sales volumes.

Inventories increased $95.1 million from the first quarter of 2024 driven by higher sales volumes and ARH new store inventory.   

Long-term debt, including current maturities, increased $107.2 million from the first quarter of 2024.  At the end of the first quarter of 2025, long-term debt consisted of $446.2 million outstanding on the revolving credit facility, $88.4 million outstanding on the ARH credit facility and $53.1 million owed to former retailers. 

For full results click here.

About Ace Hardware

Ace Hardware is the largest retailer-owned hardware cooperative in the world with over 5,800 locally owned and operated hardware stores in approximately 60 countries.  Headquartered in Oak Brook, Ill., Ace and its subsidiaries operate an expansive network of distribution centers in the U.S. and have distribution capabilities in Ningbo, China; and Cuautitlán Izcalli, Mexico. Since 1924, Ace has become a part of local communities around the world and known as the place with the helpful hardware folks. For more information, visit acehardware.com or newsroom.acehardware.com. In 2023, Ace ranked “Highest in Customer Satisfaction with Home Improvement Retail Stores” according to J.D. Power, sixteen out of the last seventeen years.

Contact:

William Guzik – Executive Vice President, Chief Financial Officer & Chief Risk Officer – guzik@acehardware.com

Source: Ace Hardware Corporation