#USA #financial results #revenue growth #Oak Brook #Ace Hardware

Ace Hardware Sets New Revenue Records in Q1 2025

Ace Hardware Corporation, the largest hardware cooperative worldwide, has reported exceptional financial performance for the first quarter of 2025. The company recorded revenues of $2.2 billion, reflecting an increase of $89.4 million, or 4.2%, compared to the same period last year. This surge in revenue highlights the company’s commitment to growth despite facing challenges in net income, which saw a decrease due to increased marketing spending and strategic investments in supply chain infrastructure.

John Venhuizen, the President and CEO of Ace Hardware, attributed the record revenue figures to a remarkable 35% increase in their digital business and a 0.6% rise in same-store sales from hardware format stores. Moreover, the company expanded its footprint with the addition of 45 new locations, bringing the total number of domestic stores to 5,177. This expansion is part of Ace's strategy to strengthen its market presence and better serve its customers.

Despite the positive revenue news, net income for the quarter was reported at $30.3 million, down by $16.6 million from Q1 2024. The decline was anticipated due to timing issues related to vendor income and planned increases in marketing expenditures. The company has expressed confidence that these investments will yield long-term benefits.

Ace's wholesale revenues totaled $2.1 billion for the quarter, marking a notable 3.8% increase from the previous year. Key growth areas included lawn and garden products, outdoor power equipment, and grilling items. However, the company described challenges in wholesale merchandise revenues, particularly with the cancellation of memberships in some domestic stores, leading to a $42.6 million decrease in revenues from comparable stores.

On the retail side, Ace Retail Holdings generated $175.2 million in revenue, an increase of 8.9% from Q1 2024. This segment benefited from a rise in same-store sales for the Great Lakes Ace Hardware chain, which recognized a 3.7% growth, while the Westlake Ace Hardware chain experienced a slight decline.

The gross profit for the wholesale segment was reported at $263.2 million, with a marginal decrease in gross margin percentage to 12.8%. The retail segment saw its gross profit increase to $84.0 million, indicating a positive trend in retail gross margin. However, overall operating expenses increased significantly, fueled by higher marketing costs and operational support for the new store openings.

In light of recent tariffs imposed, Ace has indicated potential impacts on the cost of goods and is preparing to pass on some of these costs to consumers. This strategic adjustment is expected to influence future pricing strategies and revenue projections.

Overall, Ace Hardware remains committed to innovation and customer service, recently ranked #1 in home improvement on Forbes' 2025 Best Customer Service List and #5 in Entrepreneur Magazine's ranking of the best franchises worldwide. As the company progresses through 2025, it continues to balance growth, operational excellence, and the challenges of an evolving retail landscape, reinforcing its position as a leader in the hardware market.

For more insights and updates on Ace Hardware's performance, visit their dedicated newsroom or website.