Ace sales, income lower in Q1

Ace Hardware Corp., based in Oak Brook, Illinois, reported first quarter revenue of $2.086 billion, a decrease of 5.8% from the first quarter of last year which saw $2.213 billion.

Ace reported net income of $66 million for the first quarter of 2023, a decrease of 44.7% from last year’s first quarter net income of  $120 million.

The company said revenue decline was primarily the result of the mild winter across most of the U.S., combined with the late arrival of spring-like weather, which led to declines in the sale of winter and spring goods.

Net income was also negatively affected by incremental expenses related to the expansion of warehouse space, higher payroll wage rates and higher health insurance costs, said the firm.

The approximately 3,600 Ace retailers who share daily retail sales data reported a 4.4% decrease in U.S. retail same-store-sales during the first quarter of 2023, which was the result of a 3.0% decrease in same-store transactions and a 1.4% decrease in average ticket. 

The Bottom Line: Ace Hardware sales for the first quarter fell almost 6% to just over $2 billion.

What the CEO said: “We believe an unusually cold, wet winter in California, a particularly warm, mild winter in the Midwest and Northeast, and the significant reduction in direct stimulus payments to individuals by the government were the primary drivers of our first sales and profit decline in nearly six and a half years,” said John Venhuizen, president and CEO.

Ace added 50 new domestic stores in the first quarter of 2023 and canceled 16 stores. The company reported its total domestic store count was 4,901 at the end of the first quarter of 2023, which was an increase of 111 stores from the first quarter of 2022.

On a worldwide basis, Ace said it added 52 stores in the first quarter of 2023 and canceled 19, bringing the worldwide store count to 5,779 at the end of the first quarter of 2023.

Company info: Click HERE to read the Q1 2023 full financial report from Ace Hardware.