Ace 3Q revenues fall amid lagging sales

Business Wire

OAK BROOK - Ace Hardware Corp. reported third quarter 2016 revenues were down 3.6 percent as sales lagged in the company's domestic stores.

The company said third quarter revenues were $1.2 billion, a decrease of $46.5 million from the third quarter of 2015. Net income was $50.2 million for the third quarter of 2016, a decrease of $4.1 million from the third quarter of 2015.

"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 percent consolidated revenue growth and 45.3 percent net income growth," said Ace President and CEO John Venhuizen, "We missed on sales in our Ace domestic business, but exceeded our net income budget. The Ace domestic sales shortfall was largely driven by last year's sell-in of LED lights and the lowering of wholesale selling prices to our retailers.

"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," he added.

An 0.8 percent increase in retail same-store-sales during the third quarter was reported by the approximately 3,000 Ace retailers who share daily retail sales data, and was the result of a 2.2 percent increase in average transaction size. For the first nine months of 2016, retail same-store-sales are up 1.9 percent.