Ace sales increase for Q4 and full year
Oak Brook, Ill.-based Ace Hardware Corp. reported total revenues of $921.7 million for the fourth quarter, up 7.3% from the same quarter in the previous year. Net income was $19.2 million for the fourth quarter, down 6.6%.
For the full year, total revenues were up 5.1% to $3.7 billion.
“We are very pleased with our fiscal 2011 results," said Ray Griffith, Ace president and chief executive officer. “Revenues and net income were both higher than last year and our plan and we remain committed to investing in our strategic initiatives to drive further increases at both wholesale and retail.”
Net income for the full year was $77.7 million, an increase of 3.4% compared to $75.1 million in fiscal 2010.
Merchandise sales to comparable domestic stores increased $34.8 million, or 4.9 percent, in the fourth quarter of 2011 as compared to the prior year. Merchandise sales to new domestic stores in the 2010 and 2011 fiscal year periods contributed $15.0 million in incremental sales during the quarter while merchandise revenues decreased $10.8 million due to cancelled stores.
For fiscal 2011, merchandise sales to comparable domestic stores increased $123.7 million, or 4.2%, as compared to the prior year. Merchandise sales to new domestic stores in the 2010 and 2011 fiscal year periods contributed $70.1 million in incremental sales during the year while merchandise sales decreased $51.3 million due to cancelled stores. This is a net increase in revenues of $18.8 million in 2011 related to new or cancelled stores compared to a net increase of $5.4 million in 2010. On a category basis, domestic sales were positively impacted in substantially all categories with the biggest increases in the tools, lawn and garden, paint, plumbing and electrical categories.
Merchandise sales from Ace’s international business increased $19.4 million, or 49.0%, in the fourth quarter of 2011 as compared to the prior year period primarily due to stronger sales to retailers in the Middle East and Asia regions, partially offset by lower sales to retailers in the Caribbean region.
Ace, the largest of the hardware co-ops, added 127 new domestic stores and cancelled 163 domestic stores in 2011. This brought the company’s total domestic store count to 4,072 at the end of the 2011.
For True Value CEO, growth looms large
Chicago-based True Value CEO Lyle Heidemann had some good news for dealers gathered in Orlando, Fla., during the general session of the co-op’s 2012 spring market. Sales were up, he said. So are expectations.
For the year ended Dec. 31, True Value revenue increased 3.4% to $1.86 billion, as the co-op is riding a wave of consecutive quarterly sales increases that now extends to five. Full-year earnings for the co-op were $60.3 million, down 0.7% from $60.7 million in 2010.
"Our goal is to generate $60 million of new business growth each year — that’s right, $60 million of new business growth." That’s about how much the co-op gained in 2011. So how do you keep it up? Heidemann pointed to farm & ranch products; new bill-through vendors such as Benjamin Moore; international business, expansions and relocations, "and of course," he said, "new True Value stores."
Regarding this last point, Heidemann unveiled a new option he described as "an offer you can’t refuse.” It includes a 10-year equity loan and 100% free opening stock order based on the co-op’s Destination True Value planogram assortments and recommended inventory levels.
Heidemann said the new option can reduce the investment in a new store by almost 60%.
Following the event, Heidemann told Home Channel News the proposal will change attitudes about retail expansion.
"The obvious targets are the retailers who are already running a hardware store, but this should also change the interest level for some of the people who want to open their first store," he said. "We had a lot of interest. It was a surprise announcement. We’re trying to take the cost out of opening a hardware store. It’s very capital intensive between the inventory, fixturing, computer and finishing up the store — for a 10,000-sq.-ft. store its about $850,000 to open."
For the quarter, True Value revenue was $441.9 million, up 5.8%. Quarterly earnings were $12.4 million, up 39.3% from $8.9 million in the prior-year quarter.
True Value Co. names ‘best in town’ list
From coast-to-coast to yet another coast, Chicago-based True Value Company recognized 14 True Value hardware stores as winners of its annual "Best Hardware Store in Town" award.
This year’s list included a Bermuda retailer, marking the first time a member outside of the United States was honored by the award.
“Our vision is to help every True Value be the ‘best hardware store in town,’ and these 14 stores represent what it takes to exceed customer expectations,” said Lyle Heidemann, president and chief executive officer of True Value Co.
This year’s list is as follows:
B&C True Value Home Center, Grass Valley, Calif.;
Berger True Value Hardware, Hawthorne, N.Y.;
Brinkmann Hardware, Blue Point, N.Y.;
Central True Value, Moncks Corner, S.C.;
Geiger True Value, Chillicothe, Ill.;
Gorham’s True Value, Hamilton, Bermuda;
Horton’s True Value, Chetek, Wis.;
Hoy’s True Value, Sweet home, Ore.;
Lake Isabella True Value, Lake Isabella, Calif.;
Lott True Value, Childress, Texas;
Red Lodge True Value, Red Lodge, Mont.;
Shore True Value, Somers Point, N.J.;
Strasser True Value, Kansas City, Kan.; and
Titusville True Value, Titusville, Pa.
According to the co-op, the stores went through a nomination and selection process, which included mystery shoppers visiting each selected store to gain a customer’s perspective. Store evaluation criteria included physical appearance, product selection, competitive pricing, promotional sales and customer assistance.