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Ace Hardware reports 2nd quarter results

OAK BROOK, Il. – Ace Hardware has reported second quarter 2023 revenues of $2.6 billion, an increase of $99.6 million, or 3.9%, from the second quarter of 2022. Net income was $126.7 million for the second quarter of 2023, an increase of $1.9 million from the second quarter of 2022.

“A 45% increase in visits to Acehardware.com drove an 18% increase in our digital business, a 3% increase in store visits, and an encouraging 1.1% increase in same-store transactions during the quarter,” said John Venhuizen, president & CEO. “I’m very proud of the Ace team for delivering a 3.9% increase in revenue and a 6.6% increase in operating income within a difficult environment for retailers of durable goods.”

The approximately 3,600 Ace retailers who share daily retail sales data reported a 0.4% increase in U.S. retail same-store-sales during the second quarter of 2023, which was the result of a 1.1% increase in same-store transactions; partially offset by a 0.8% decrease in average ticket.

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Revenues

Consolidated revenues for the quarter ended July 1, 2023 totaled $2.6 billion. Total wholesale revenues were $2.4 billion, an increase of $96.9 million, or 4.3%, as compared to the prior year second quarter. Increases were seen across a majority of departments with lawn and garden, paint, and grilling showing the largest gains. New stores are defined as stores that were activated from January 2022 through June 2023. The Company had an increase in wholesale merchandise revenues from new domestic stores of $58.4 million during the second quarter of 2023, while wholesale merchandise revenues decreased $9.8 million during the second quarter due to domestic stores whose memberships were cancelled. Wholesale merchandise revenues to comparable domestic stores increased $11.7 million for the quarter. The Company’s Ace International Holdings, Ltd. subsidiary experienced a $3.7 million decrease in wholesale revenue versus the second quarter of 2022, while Ace Wholesale Holdings LLC reported a $0.2 million decrease in wholesale revenues from the second quarter of 2022.

Total retail revenues for the quarter were $260.7 million, an increase of $2.7 million, or 1.0%, as compared to the prior year second quarter. Retail revenues were negatively impacted by the closure of The Grommet during the third quarter of 2022, resulting in the absence of any revenues from Ace Ecommerce Holdings LLC (“AEH”) in the second quarter of 2023 compared with $5.6 million in the second quarter of 2022.  Retail revenues from Ace Retail Holdings LLC (“ARH”) were $260.7 million in the second quarter of 2023, an increase of $8.3 million, or 3.3%, from the second quarter of 2022.  This increase was primarily driven by new stores added by the Westlake Ace Hardware (“Westlake”) and the Great Lakes Ace Hardware (“GLA”) chains since the end of the first quarter of 2022, which contributed $6.7 million of incremental revenues.  Westlake experienced a 2.4 percent increase in same-store-sales while GLA experienced a 1.5 percent decrease in same-store-sales in the quarter.  Westlake and GLA together operated 231 stores at the end of the second quarter of 2023 compared to 215 stores at the end of the second quarter of 2022.

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Ace added 36 new domestic stores in the second quarter of 2023 and cancelled 13 stores.  The Company’s total domestic store count was 4,924 at the end of the second quarter of 2023 which was an increase of 108 stores from the second quarter of 2022.  On a worldwide basis, Ace added 46 stores in the second quarter of 2023 and cancelled 14, bringing the worldwide store count to 5,811 at the end of the second quarter of 2023.

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