Ace Reports Record Second Quarter Revenue Results
Ace Hardware Corporation reported a 3.1% increase in revenue for the second quarter of 2024.
Revenues totaled $2.7 billion, an increase of $81.7 million from Q2 2023. Net income was $114.4 million, down $12.3 million from the same time in 2023. The decrease was due to planned increases in marketing and retail store expenses. The increased spending was expected to be offset by an improved gross margin rate. Product cost deflation and higher transportation costs prevented the margin expansion.
“I'm pleased to report record second quarter revenue, a 16% increase in our digital business and 110 new stores year-to-date," said John Venhuizen, Ace president & CEO. "During the quarter, we added our 5,000th store and are on track to add 200 new stores in 2024. I'm so appreciative of the Ace team, particularly our red-vested heroes who grace our neighborhood stores."
The approximately 3,800 Ace retailers who share daily retail sales data reported a 1.7% decrease in U.S. retail same-store sales during the second quarter of 2024, which was the result of a 2.6% decrease in same-store transactions; partially offset by a 0.9% increase in average ticket.
Ace Q2 Review
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Revenue
Consolidated revenues for the quarter ended June 29, 2024, totaling $2.7 billion. Total wholesale revenues were $2.5 billion, an increase of $83.7 million, or 3.5%, as compared to the prior year's second quarter. Increases were seen across many departments with outdoor power equipment, power tools, lawn and garden, and grilling showing the largest gains.
Wholesale merchandise revenues to new domestic stores activated from January 2023 through June 2024 contributed $68.9 million of incremental revenues during the second quarter of 2024, while wholesale merchandise revenues decreased by $7.4 million due to domestic stores whose memberships were canceled. Wholesale merchandise revenues to comparable domestic stores decreased by $41.8 million for the quarter.
Total retail revenues from Ace Retail Holdings LLC for Q2 2024 was $258.7 million, a decrease of $2.0 million, or 0.8%, as compared to 2023.
According to the company, the Westlake Ace Hardware (“Westlake”) chain experienced a 4.6% decrease in same-store-sales, while the Great Lakes Ace Hardware (“GLA”) chain experienced a 0.4% decrease in same-store sales. The new stores opened by Westlake and GLA since the end of the first quarter of 2023 contributed $7.5 million of incremental revenues during the second quarter of 2024. Westlake and GLA together ran 240 stores at the end of Q2 2024 compared to 231 stores at the end of Q2 2023.
At the end of Q2 2024, Ace’s total domestic store count was 5,084, an increase of 160 stores from 2023. The global store count was 5,965.
Gross Profit
Wholesale gross profit for the three months ending June 29 was $335.6 million, an increase of $12.0 million. The wholesale gross margin percentage was 13.7% of wholesale revenues in Q2 2024, up slightly from 13.6% in Q2 2023.
Ace reported a retail gross profit of $111.8 million, a decrease of $0.8 million. The retail gross margin percentage was unchanged at 43.2% of retail revenues in 2024 and 2023.
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