Ace gains on income with minimal movement on revenue
Ace Hardware reported a slight increase in revenue during the first quarter, as well as more substantial progress in net income.
Revenue came in at $1.2 billion, up 0.1% from the first quarter of 2016. Net income of $28.3 million was up 8.4% over the year.
Same-store sales were down 0.2% due to decreased customer traffic, reported by the approximately 3,000 Ace retailers who share daily retail sales data.
John Venhuizen, president and CEO of Ace, acknowledged the somewhat lackluster sales performance.
“I’m delighted to report an 8.4% increase in net income, a double digit jump in accrued patronage dividends for our owners and surpassing a global store count of 5,000 stores in the quarter," said Venhuizen. “While revenue improved, our increase fell short of our expectations. And despite the obvious temptation, I’ll resist pinning the blame on the less than favorable weather.”
Retail revenues from Ace Retail Holdings were $52.0 million in the first quarter of 2017, however, up 2.8% from the first quarter of 2016 thanks to the addition of new retail stores. However, same-store-sales decreased 3.0%.
The co-op also added 16 new domestic stores and cancelled 21 for a net decrease of 5 stores during the quarter — a total domestic store count of 4,358. This was still up 56 stores from the first quarter of 2016.
A brave, new World and Main
The changes at World and Main LLC have been significant. But the company says it hasn’t changed its focus on bringing products to its customers.
The Cranberry, New Jersey-based home improvement distributor and family of brands named Bryan Yeazel as new CEO in August of last year. In November it sold its Houston-based hardware distribution business formerly known as Handy Hardware. And the company named a trio of c-level executives to its ranks in March.
One of those executives, Brenda Heffelfinger, spoke with HBSDealer during the recent National Hardware Show, where the company showed off the latest from its brands, which include AquaPlumb, Comfort Zone, WordLock, Ultra and more.
“While there have been many changes, our commitment to the retailer is steadfast and now stronger than ever,” Heffelfinger said, when asked if the changes brought a new emphasis to World and Main. “We continue to research, create and launch dozens of new products that meet consumers’ needs every year.”
At the company’s booth in Las Vegas, the product displays included evaporative coolers, barn door hardware and newly branded paint brushes.
“World and Main is a national distribution company that develops, markets and distributes products to leading retailers, wholesalers, home centers, hardware stores and more,” Heffelfinger said. “Our focus is to support our customers by offering excellent service and by bringing new products to market in our key core product categories.”
HDW expounds on move to Texas
Las Vegas — As Hardware Distribution Warehouses Inc. plans its move from Shreveport, La., to Marshall, Texas — just 22 miles to the west — CEO Kenny Beauvais explained that the move was driven by the need for a right-sized, modern distribution center.
It also makes good financial sense, he said. Consolidating its Houston and Shreveport facilities into the Marshall DC is expected to produce direct cost savings in the neighborhood of $1.6 million per year. That's the result of several factors including the new location in a Triple Free Port Zone, the Texas term for no inventory tax.
"From a financial perspective, it's very financially advantageous to our company," Beauvais said.
The announced move to Marshall comes about six months after HDW bought Handy Hardware from World and Main, including its Houston distribution center.
The Houston facility was too large, he said, it proved impractical to reduce it in size. "So we looked for other facilities and we actually located three candidates in Texas. And the Marshall facility was far and above the best. The majority if not all of the Shreveport employees will be able to drive. That really really worked great."
The new facility in Marshall will feature a pallet conveyor to move product from the receiving doors all the way to the main shipping floor, a more efficient method than moving pallets by forklift. Other features include barcode scanning and one lane (out of 13) dedicated to e-commerce.
Beauvais explained the growth and the activity this way: "We have been very fortunate and been at the right place at the right time to take advantage of market opportunities."
The company plans to begin shipments from Marshall by September. And Beauvais emphasized that a smooth transition is job one for the distributor. "We can't have any interruptions," he said. "It has to be ready to completely take over the business."