First-quarter revenue reached record heights for Ace Hardware Corp., but the cooperative turned in lower profits, citing timing and investments as main causes of the earnings slip.
Company net income was $30.7 million versus $47.2 million in the year-earlier period. Ace pointed to the timing of income earned from vendors, as well as planned increases in marketing spend and supply chain infrastructure investments, as the factors behind the decline.
Revenue was $2.23 billion versus $2.14 billion in the year-prior quarter, the company maintained. Wholesale revenue was $2.05 billion while retail revenue as $175.2 million versus $1.98 billion and $160.9 million, respectively, in the year-previous period.
The 3,900 Ace stores in the United States that share daily retail revenue data reported flat year-over-year, first-quarter comparable sales with a 1.1% rise in average ticket offset by a 1.1% decline in comp transactions.
Operating income was $39.6 million versus $55.1 million in the year-before quarter.
In announcing the financial results, John Venhuizen, Ace president and CEO, said the company enjoyed “a 35% increase in our digital business” during the quarter year over year, which helped revenues set the opening-quarter record, as did adding new U.S. stores.
Ace added 45 domestic stores in the quarter and cancelled 12 stores, bringing the company’s total domestic store count to 5,177, up 112 year over year.
