After record 2015 sales, Ace Hardware Corp. expected but underestimated a revenue drop in third-quarter 2016, according to the co-op’s top executive.
Ace’s financial performance in third-quarter 2015 was the best in the company’s history, with revenue up 13.2 percent and net income up 45.3, according to president and CEO John Venhuizen. The co-op’s expectation was for more modest growth in 2016, but third-quarter sales still came in lower than projected, he says.
Ace reported its financial results Nov. 17, showing revenue of $1.2 billion, which was a dip of 3.6 percent from the same period in 2015. Net income was $50.2 million, for an 8 percent decrease year over year. Total wholesale revenue came in at $1.17 billion, which was a decrease of 3.8 percent.
“We missed on sales in our Ace domestic business, but exceeded our net income budget,” Venhuizen says.
Wholesale price cuts resulted in less margin for the co-op, but produced better margins for retailers, Venhuizen says.
Retailers reported increases in same-store sales for the quarter, for an overall increase of 0.8 percent that reflects growth of 2.2 percent in average transaction size, the co-op says.
Ace Hardware is headquartered in Oak Brook, Illinois, and has 4,900 retailer-owned stores located around the world.