Ace Hardware Sees Q2 Revenue Growth of 5.9%

• Record second quarter revenues of $3.0 billion, an increase of 5.9 percent
• Record second quarter net income of $155.6 million, an increase of $36.5 million
• Accrued patronage dividend to shareholders of $142.8 million
• Digital revenue increased 12.8 percent from the second quarter of 2025

Ace Hardware Corporation today reported second quarter 2026 revenues of $3.0 billion, an increase of $165.8 million, or 5.9 percent, from the second quarter of 2025.  Net income was $155.6 million for the second quarter of 2026, an increase of $36.5 million from the second quarter of 2025.

"We are grateful that more consumers continue to choose Ace, resulting in the highest quarterly revenue and earnings in the company's storied history," said John Venhuizen, President and CEO. "Solid same-store sales growth, double-digit digital growth, continued expansion of our store footprint, and the entrepreneurial spirit of our local retailers fueled a 5.9 percent increase in revenue to $3.0 billion, and a 31 percent increase in net income to $155.6 million.  My thanks to the hard working Ace team for these record results."

The approximately 4,000 Ace retail stores that consistently share daily retail sales data reported a 1.1 percent increase in U.S. retail same-store-sales during the second quarter of 2026, which was the result of a 3.1 percent increase in average ticket partially offset by a 1.9 percent decrease in same-store transactions.

Revenues

Consolidated revenues for the quarter ended July 4, 2026 totaled $3.0 billion.  Total wholesale revenues were $2.7 billion, an increase of $159.9 million, or 6.3 percent, as compared to the prior year second quarter.  Increases were seen across most departments with grilling, outdoor power equipment, paint sundries, and impulse and front end, showing the largest gains. 

Wholesale merchandise revenues to new domestic Ace stores activated from January 2025 through June 2026 contributed $67.2 million of incremental revenues during the second quarter of 2026, while wholesale merchandise revenues decreased $9.1 million during the second quarter due to domestic Ace stores whose memberships were cancelled.  Wholesale merchandise revenues to comparable domestic Ace stores increased $56.6 million for the quarter. The Company's Ace International Hardware Corporation subsidiary experienced a $0.7 million increase in wholesale revenue from the second quarter of 2025.  Ace Wholesale Holdings, LLC reported a $16.8 million increase in wholesale revenues, or 10.7 percent, from the second quarter of 2025 primarily due to higher sales to pro lumber and hardware customers.  The Company's Ace Services Holdings, LLC subsidiary, which is reported as part of the Company's wholesale business, experienced a $0.1 million decrease in revenues from the second quarter of 2025. 

Total retail revenues from Ace Retail Group, Inc. ("ARG") for the quarter were $280.7 million, an increase of $5.9 million, or 2.1 percent, as compared to the prior year second quarter.  ARG experienced a same-store sales increase of 0.4 percent during the second quarter of 2026.  The new stores opened by ARG since the end of the first quarter 2025 contributed $6.3 million of incremental revenues during the second quarter of 2026.  ARG operated 268 stores at the end of the second quarter of 2026 compared to 261 stores at the end of the second quarter of 2025.

Ace added 34 new domestic stores in the second quarter of 2026 and cancelled 17 stores.  This brought the Company's total domestic store count to 5,283 at the end of the second quarter of 2026, an increase of 88 stores from the second quarter of 2025. 

Gross Profit

Wholesale gross profit for the quarter ended July 4, 2026 was $399.6 million, an increase of $37.0 million from the second quarter of 2025.  The wholesale gross margin percentage was 14.8 percent of wholesale revenues in the second quarter of 2026, up from 14.2 percent in the second quarter of 2025.  This increase in rate was primarily the result of the timing of income earned from vendors.

Retail gross profit for the quarter ended July 4, 2026 was $127.8 million, an increase of $8.7 million from the second quarter of 2025.  The retail gross margin percentage was 45.5 percent of retail revenues in the second quarter of 2026, up from 43.3 percent in the second quarter of 2025.  The increase in retail gross margin percentage was primarily due to vendor funds earned related to new store openings.  For ARG, retail gross profit is based on the Company's wholesale acquisition cost of product, not ARG's acquisition cost which includes a markup from the Company.

Expenses and Other

Wholesale operating expenses increased $10.2 million, or 3.6 percent, from the second quarter of 2025. The increase is primarily driven by higher professional fees and an increase in marketing and advertising spending. As a percentage of wholesale revenues, wholesale operating expenses decreased to 10.8 percent of wholesale revenues in the second quarter of 2026 from 11.0 percent of wholesale revenues in the second quarter of 2025.

Retail operating expenses increased $5.8 million, or 7.2 percent, from the second quarter of 2025.  The increase was primarily driven by expenses incurred related to the new stores added since the end of the first quarter of 2025.  Retail operating expenses as a percentage of retail revenue increased to 30.9 percent in the second quarter of 2026 from 29.4 percent in the second quarter of 2025. 

Other income, net increased $6.8 million from the second quarter of 2025 primarily due to an $11.8 million refund received during the second quarter of 2026 from U.S. Customs and Border Protection related to tariffs previously paid under the International Emergency Economic Powers Act (IEEPA).

Balance Sheet and Cash Flow

Receivables increased $93.6 million from the second quarter of 2025 due to higher sales volumes.

Long-term debt, including current maturities, increased $100.1 million from the second quarter of 2025.  At the end of the second quarter of 2026, long-term debt consisted of $460.2 million outstanding on the revolving credit facility, $73.4 million outstanding on the ARG credit facility and $52.9 million owed to former retailers. 

Source : Ace Hardware

Image : Ace Hardware

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.