Ace's sales miss in Q3

Ace Hardware Corporation reported a sales miss in the third quarter -- even if the co-op wasn't expecting to match its impressive results in the prior-year quarter.

“Our expectation for the third quarter of this year was modest sales growth and lower net income as a result of last year’s strong 13.2% consolidated revenue growth and 45.3% net income growth,” said John Venhuizen, president and CEO. “We missed on sales in our Ace domestic business, but exceeded our net income budget.” 

"The sales miss was largely driven by last year’s sell-in of LED lights and the lowering of wholesale selling prices to our retailers," he added. "For our shareholders, these wholesale price reductions were positive as over three-quarters of our wholesale price changes were decreases, resulting in less margin for the corporation, but more margin for our retailers.”

Total revenue for the quarter was $1.2 billion, a decrease of 3.6% from the previous year. Decreases were noted across several departments with electrical, paint and plumbing showing the largest declines.

Meanwhile, net income of $50.2 million was down by $4.1 million from the year-ago quarter.

Retail same-store sales moved the needle at an increase of 0.8%, however, riding on the back of a 2.2% increase in average transaction size.

Ace added 36 new domestic stores in the third quarter of 2016 and cancelled 16 stores, with total domestic store count now at 4,335. That's an increase of 60 stores from the third quarter of 2015.

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