Wholesale sales down 2.4% at Ace

Ace Hardware Corp., the hardware industry's largest co-op, posted declines in sales and earnings in the first quarter. Paint, hardware and plumbing showed declines, while the lawn-and-garden category performed well.

“While our overall sales results are reflective of the continued challenging sales environment, we have several initiatives underway to ensure we are well positioned to drive results throughout the recovery,” said Ace CEO Ray Griffith.

Oak Brook, Ill.-based Ace reported sales of $830.7 million in the quarter ended April 3. That's down 2.4% from the $851.3 million in the prior-year quarter.

Net income was $11.8 million, down 18%.

Ace added 20 new stores and canceled 47 stores in the first quarter and ended the quarter with a total store count of 4,464.

Griffith pointed to such positive trends as alliances with Benjamin Moore paint, which will be available in more Ace stores, and Craftsman. He also pointed to completion of the second phase of the company's Business Transformation Project that replaces legacy systems with new supply chain technology.

Operating expenses increased 1.7% in the quarter, partly as a result of information technology costs and the company's Business Transformation Project.

Ace paid its retail members $29.2 million of cash patronage distributions in March 2010. This is compared with last year’s payment of $15.6 million, which was paid in April 2009.