Ace Hardware reports record Q3 results
New store growth and digital sales are highlights of the co-op’s third quarter
Oak Brook, Ill.-based Ace Hardware reported $1.43 billion in third quarter revenues, up 6.3% from the same quarter last year. That record figure was fueled by new store growth, comp-store sales growth and a big jump in e-commerce.
The hardware industry’s largest retailer co-op also reported a third-quarter decline in net income, the result of higher expenses including those related to tight labor market and employee turnover at warehouses. Net income was $36.3 million for the third quarter, down from $53.8 million in the third quarter of 2017.
Read the full press release here.
“Strong new store growth, increased same-store sales, and a 35% increase in acehardware.com revenues helped us realize a healthy 6.3% increase in revenues during the third quarter,” said John Venhuizen, President and CEO. “However, we are not immune to the pain of the tight labor market. Expanded product assortment, higher inventory and increased warehouse employee turnover drove expenses up and profits down for the quarter.”
During the quarter, the co-op pushed its total, worldwide store count to 5,210 – 4,449 in the United States. Ace added 50 new domestic stores in the third quarter and cancelled 24 stores. Compared to the third quarter of 2017, Ace’s has added 83 stores in the U.S.
The company said its wholesale operating expenses increased $13.2 million, or 11.4%, from the third quarter of 2017. The increase includes higher payroll expenses from prior year to support higher revenues and lower distribution center productivity due to high employee turnover, labor costs incurred to setup the new Fredericksburg center while shutting-down the Prince George facility. Higher advertising expenses also factored.
Retail revenues from Ace Retail Holdings – essentially the co-op owned Westlake Ace Hardware –were $79.0 million in the third quarter, up 20.6%. The increase was the result of new retail stores added since the third quarter of 2017. ARH operated 122 stores at the end of the third quarter of 2018 compared to 108 stores at the end of the third quarter of 2017.
Venhuizen also highlighted the efforts to perform in extreme weather conditions. “I’d like to thank the entire Ace team for their heroic efforts to get products to our retailers that were affected by the devastation of hurricanes Florence and Michael.”
Do it Best names Rental Merchandise Manager
The Indiana-based co-op announced the promotion of Lauren Wilson.
Fort Wayne, Ind.-based Do it Best promoted Lauren Wilson to Merchandise Manager. Wilson will develop, implement and communicate comprehensive programs for the co-op’s Rental, Impulse, Snacks and Store Supplies departments, as well as work closely with vendors to deliver profitable promotions and pricing on behalf of member-owners.
The move will take effect Dec. 3.
“Lauren’s extensive experience as a part of our merchandise team will allow her to make immediate contributions in this important role on our team,” said Dent Johnson, VP of merchandising at Do it Best. “She’s already proven her ability to drive results for our members – and we are excited to see how she will help them grow even more with the right products and programs for these categories.”
Wilson is a six-year veteran of Do it Best, most recently serving as the associate merchandise manager for the Lawn & Garden Green Goods department. She’s also worked as the associate merchandise manager in global sourcing. Wilson earned an MBA from Indiana University in 2008.
“I am honored to take on the challenges and opportunities presented by this role,” Wilson said, “and I’m eager to help drive growth for our members through these profitable categories.”
Mid-States grows in Missouri
Farm-and-ranch distributor buys former Toy’s ‘R’ Us facility.
Farm-and-ranch co-op Mid-States Distributing LLC, purchased a distribution center previously owned by Toy’s “R” Us in Lee’s Summit, Mo. A ribbon-cutting ceremony on Nov. 13 included Mid-States executives and local officials.
Mid-States, which has 39 retail members operating some 700 store locations in the U.S. and Canada.
The company plans to invest more than $35 million in the Lee’s Summit facility, which measures more than 725,000 square feet on a 41-acre lot
Tom Mahlke, president and CEO. Told the Fox News affiliate in Kansas City, Mo., that the company will enjoy the ability to grow into the facility. “We’re going to start out and probably we’ll occupy maybe a third to a half of the building,” he said. “But our growth plans suggest we’re going to need all of the building in the next 2 to 5 years.”
Included on the “Our Members” page of the Mid-States web site are Atwoods of Enid, Okla.; Bomgaars Supply of Sioux City, Iowa; and C-A-L Ranch Stores of Idaho Falls, Idaho. Mid-States describes its annual sales as more than $6.5 billion.