Ace reports record Q2 revenues
Ace Hardware Corporation is reporting second quarter 2024 revenues of $2.7 billion, an increase of $81.7 million (or 3.1 percent) from the second quarter of 2023. Net income was $114.4 million for Q2 2024, a decrease of $12.3 million from Q2 2023.
This decrease was due to planned increases in marketing expenses and retail store expenses, according to the company. The increased spending was expected to be offset by an improved gross margin rate. However, product cost deflation and higher transportation costs prevented the margin expansion.
"I'm pleased to report record second quarter revenue, a 16 percent increase in our digital business and 110 new stores year-to-date," said John Venhuizen, Ace president and 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."
Ace Hardware's Q2 2024 highlights
- Record second quarter revenues of $2.7 billion, an increase of 3.1 percent
- Online sales increased 16 percent
- Second quarter net income of $114.4 million, a decrease of 9.7 percent
- Delivered twelfth consecutive month of cost reductions to Ace store owners
- Accrued patronage dividend to shareholders of $109.3 million, a decrease of 6.3 percent from the second quarter of 2023
- Ace reaches 5,000 U.S. locations; on pace to add 200 new stores in 2024
The approximately 3,800 Ace retailers who share daily retail sales data reported a 1.7 percent decrease in U.S. retail same-store-sales during the second quarter of 2024, which was the result of a 2.6 percent decrease in same-store transactions; partially offset by a 0.9 percent increase in average ticket.
Revenue breakdowns
Consolidated revenues for the quarter ended June 29, 2024 totaled $2.7 billion. Total wholesale revenues were $2.5 billion, an increase of $83.7 million (or 3.5 percent) as compared to the prior year 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 $7.4 million during the second quarter due to domestic stores whose memberships were cancelled. Wholesale merchandise revenues to comparable domestic stores decreased $41.8 million for the quarter.
Total retail revenues from Ace Retail Holdings LLC for the quarter were $258.7 million, a decrease of $2 million (or 0.8 percent) as compared to the prior year second quarter. The Westlake Ace Hardware chain experienced a 4.6 percent decrease in same-store-sales, while the Great Lakes Ace (GLA) Hardware chain experienced a 0.4 percent decrease in same-store-sales in the quarter. 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 operated 240 stores at the end of the second quarter of 2024 compared to 231 stores at the end of the second quarter of 2023.
The company's total domestic store count was 5,084 at the end of the second quarter of 2024, which was an increase of 160 stores from the second quarter of 2023. The worldwide store count was 5,965 at the end of the second quarter of 2024.
Click here for a more detailed breakdown of Ace's Q2 financial picture.
