Ace Hardware Reports Record Q4 Performance

Ace Hardware Corporation (“Ace” or the “Company”), the largest retailer-owned hardware cooperative in the world, today reported record fourth quarter 2019 revenues of $1.5 billion, an increase of $85.1 million, or 6.1 percent, from the fourth quarter of 2018. Net income was $3.5 million for the fourth quarter of 2019, a decrease of $21.7 million from the fourth quarter of 2018. Included in the results for the fourth quarter are pre-tax charges of $8.5 million for a non-cash goodwill impairment charge related to The Grommet, $5.0 million for the write-down of inventory related to the transition to the Benjamin Moore paint program, $2.5 million for retail pre-opening costs related to new Westlake stores in California, and $1.2 million for severance related costs.

Full year revenues were a record $6.1 billion, an increase of $354.2 million, or 6.2 percent, from 2018 revenue. Net income for fiscal 2019 was $140.4 million, an increase of $12.2 million, from fiscal 2018. The increase was primarily due to higher revenues and additional vendor funds earned, partially offset by the paint inventory write-down, retail pre-opening costs associated with the eleven new Westlake stores in California and the non-cash goodwill impairment charge.

“I’m delighted to report record revenue that exceeded $6 billion for the first time in Ace’s history,” said John Venhuizen, President and CEO. “Our best-ever sales and dividend payments to shareholders were largely driven by 208 new store openings across the globe, a 59 percent increase in our acehardware.com business and solid same store sales growth of 2.8 percent from our very talented local Ace owners across the U.S.”

“Our Ace Wholesale Holdings and Ace Ecommerce Holdings (The Grommet) businesses however, struggled to achieve their revenue targets. Both businesses posted large losses in 2019. While our plans call for significant improvements in these businesses going forward, the facts are that they were a meaningful drag on an otherwise stellar year for the Company.”

“We expect the Ace Wholesale Holdings business to recover substantially in 2020 and to achieve operating profitability in 2021. The recovery of The Grommet business, however, is likely to take longer. As such, we were required to take a non-cash goodwill impairment charge of $8.5 million in the fourth quarter of 2019 to write-down the value of our investment in The Grommet.”

Highlights

• Record fourth quarter revenues of $1.5 billion, an increase of 6.1 percent from last year
• U.S. same-store-sales up 2.1 percent during the quarter and 2.8 percent for the year
• Acehardware.com revenues up 52 percent during the quarter and 59 percent for the year
• Record full year revenues of $6.1 billion, an increase of 6.2 percent from last year
• Full year net income of $140.4 million, an increase of 9.5 percent from last year
• Record patronage dividend to shareholders of $182.2 million, an increase of 28 percent from 2018
  
  

Source : Ace Hardware

Image : Susan Montgomery/Shutterstock.com

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