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

Ace Hardware Corporation (“Ace” or the “Company”) 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.

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