Ace reports strong revenue growth
Oak Brook, Ill.-based Ace Hardware Corp. reported fourth quarter 2017 revenues of $1.32 billion, up 6.8% from the fourth quarter of 2016. Net income was $14.2 million for the fourth quarter of 2017, a decrease of $7.3 million from the fourth quarter of 2016. This decrease included a charge of $4.1 million due to the new tax legislation enacted in 2017 as well as increased warehouse costs incurred as part of the warehouse network reconfiguration.
Net income for the full year was $147.4 million, a decrease of $13.8 million, from fiscal 2016. This decrease was the result of a charge of $4.1 million due to the new tax legislation enacted in 2017 as well as $9.5 million of after-tax charges to reposition the warehouse and call center network to support future growth. Excluding these unbudgeted charges, the Company’s net income for fiscal 2017 exceeded its 2017 plan.
“New store growth, a 3.1 percent increase in same-store retail sales, along with revenues from our acquisition of The Grommet at the end of the last quarter, were the predominant drivers behind our strong 6.8 percent overall sales increase and record setting fourth quarter revenue,” said John Venhuizen, President and CEO. “I’m also encouraged to report that 2017 marked the fifth-straight year of increased customer transactions at retail, the sixth-straight year of net new store count growth, the eighth-straight year of increased same-store-sales, and the eleventh-straight year receiving the J.D. Power award for highest customer satisfaction.”
The 3.1% increase in retail same-store-sales during the fourth quarter of 2017 reported by the approximately 3,000 Ace retailers who share daily retail sales data was the result of a 3.4 percent increase in average ticket.
In 2017, Ace added 152 new domestic stores, bringing its domestic stor count to 4,418, a net gain of 55 stores from the end of fiscal 2016.
[For more details on Ace's fourth quarter and full year results, click here.]
Consolidated revenues for the quarter ended Dec. 30 totaled $1.32 billion. Total wholesale revenues were $1.23 billion, an increase of 5.1% as compared to the prior year fourth quarter.
Increases were noted across all departments with power tools and paint showing the largest gains, the co-op said.
Total retail revenues for the quarter were $89.4 million, an increase of $25.0 million, or 38.8 percent, as compared to the prior year fourth quarter. Retail revenues from Ace Retail Holdings — or Westlake Ace Hardware — were $67.8 million in the fourth quarter of 2017. This was an increase of 5.3% from the fourth quarter of 2016. The increase was primarily the result of new retail stores added since the fourth quarter of 2016.
Retail revenues from Ace Ecommerce Holdings, which was formed in the third quarter of 2017 for the acquisition of The Grommet were $21.6 million in the fourth quarter of 2017.
Consolidated revenues for fiscal 2017 totaled $5.4 billion an increase of 5.1%, as compared to the prior year. Total wholesale revenues were $5.1 billion, an increase of 4.7%. Increases were noted across all departments with outdoor living, power tools and lawn and garden showing the largest gains.