ACE HARDWARE REPORTS THIRD QUARTER 2025 RESULTS

— Record third quarter revenues of $2.5 billion, an increase of 5.5 percent

— Digital revenue increased 34.9 percent from the third quarter of 2024

— Third quarter net income of $99.7 million, an increase of 0.7 percent

— Accrued shareholder dividends of $122.1 million, an increase of 15.8 percent from the third quarter of 2024

— Ace ranked as the fifth largest franchise by Franchise Times for the fourth consecutive year

Ace Hardware Corporation (“Ace” or the “Company”) today reported third quarter 2025 revenues of $2.5 billion, an increase of $130.3 million, or 5.5 percent, from the third quarter of 2024. Net income was $99.7 million for the third quarter of 2025, an increase of $0.7 million from the third quarter of 2024. Included in the results for the third quarter were $17.8 million in non-recurring asset impairment charges related to the Company's International operations.

https://mma.prnewswire.com/media/2820386/Ace_Q3_2025_Earnings_Infographic.jpg

“Ace had a very strong third quarter. I'm delighted to report a 5.5 percent increase in revenue, a 1.6 percent increase in same-store sales, and a 34.9 percent surge in our digital business,” said John Venhuizen, President and CEO. “My thanks to the Ace team and our local owners for providing their neighbors with the service for which Ace has become famous.”

The approximately 3,900 Ace retailers who share daily retail sales data reported a 1.6 percent increase in U.S. retail same-store sales during the third quarter of 2025, which was the result of a 2.0 percent increase in average ticket; partially offset by a 0.4 percent decrease in same-store transactions.

Revenues

Consolidated revenues for the quarter ended September 27, 2025 totaled $2.5 billion. Total wholesale revenues were $2.3 billion, an increase of $120.6 million, or 5.6 percent, as compared to the prior year third quarter. Increases were seen across most departments with outdoor power equipment, grilling, fertilizers, power tools, and impulse showing the largest gains.

Wholesale merchandise revenues to new domestic Ace stores activated from January 2024 through September 2025 contributed $58.4 million of incremental revenues during the third quarter of 2025, while wholesale merchandise revenues decreased $10.0 million during the third quarter due to domestic Ace stores whose memberships were cancelled. Wholesale merchandise revenues to comparable domestic Ace stores increased $16.6 million for the quarter. Ace Wholesale Holdings reported a $30.9 million increase in wholesale revenues, or 25.4 percent, from the third quarter of 2024 due to new customers. Ace International Hardware (“AIH”) experienced a $13.2 million decrease in wholesale revenue from the third quarter of 2024, primarily due to the loss of what had been AIH's largest customer. Ace Services Holdings, which is reported as part of the Company's wholesale business, experienced a $8.1 million increase in revenues from the third quarter of 2024.

Total retail revenues from Ace Retail Holdings (“ARH”) for the quarter were $213.1 million, an increase of $9.7 million, or 4.8 percent, as compared to the prior year third quarter. The Great Lakes Ace Hardware chain experienced a 4.6 percent increase in same-store sales while the Westlake Ace Hardware chain experienced a 0.6 percent increase in same-store sales in the quarter. ARH operated 263 stores at the end of the third quarter of 2025 compared to 253 stores at the end of the third quarter of 2024.

Ace added 41 new domestic stores in the third quarter of 2025 and cancelled 16 stores. This brought the Company's total domestic store count to 5,220 at the end of the third quarter of 2025, an increase of 127 stores from the third quarter of 2024.

Gross Profit

Wholesale gross profit for the quarter ended September 27, 2025 was $345.9 million, an increase of $32.8 million from the third quarter of 2024. The wholesale gross margin percentage was 15.2 percent of wholesale revenues in the third quarter of 2025, up from 14.6 percent in the third quarter of 2024. The increase in gross margin percentage was planned and was the result of product cost inflation being passed through to customers.

Retail gross profit for the quarter ended September 27, 2025 was $99.9 million, an increase of $5.1 million from the third quarter of 2024. The retail gross margin percentage was 46.9 percent of retail revenues in the third quarter of 2025, up from 46.6 percent in the third quarter of 2024. For ARH, retail gross profit is based on the Company's wholesale acquisition cost of product, not ARH's acquisition cost which includes a markup from the Company.

Expenses and Other

Wholesale operating expenses increased $29.3 million, or 12.9 percent, from the third quarter of 2024. Included in this increase were non-recurring asset impairment charges related to the Company's International operations. The remaining increase was primarily driven by higher compensation benefit expenses and planned increases in supply chain spending. As a percentage of wholesale revenues, wholesale operating expenses increased to 11.3 percent of wholesale revenues in the third quarter of 2025 from 10.6 percent of wholesale revenues in the third quarter of 2024. Without the non-recurring asset impairment charges, wholesale operating expenses as a percent of wholesale revenues were 10.8 percent.

Retail operating expenses increased $7.1 million, or 9.6 percent, from the third quarter of 2024. The increase was driven by expenses related to the new stores added since the end of the second quarter of 2024. Retail operating expenses as a percentage of retail revenue increased to 38.2 percent in the third quarter of 2025 from 36.5 percent in the third quarter of 2024.

Interest expense increased $2.2 million from the third quarter of 2024 due to higher average borrowings.

Other income, net increased $4.1 million from the third quarter of 2024 primarily due to an insurance recovery related to the 2023 cybersecurity incident.

Balance Sheet and Cash Flow

Long-term debt, including current maturities, increased $100.0 million from the third quarter of 2024. At the end of the third quarter of 2025, long-term debt consisted of $472.0 million outstanding on the revolving credit facility, $70.3 million outstanding on the ARH credit facility and $54.1 million owed to former retailers.

About Ace Hardware

Ace Hardware is the largest hardware cooperative in the world, serving more than 8,800 locally owned and operated stores around the globe, while providing the best products, services, and operating methods to over 5,200 Ace retail stores in the United States. Ace Hardware's family of brands includes Ace Hardware, Emery Jensen Distribution, and independent retailers worldwide. Headquartered in Oak Brook, Illinois, Ace operates an expansive network of U.S. distribution centers, along with international capabilities in Ningbo, China, and Cuautitlán Izcalli, Mexico. Since 1924, Ace has been a part of local communities, known as the place with the helpful hardware folks. For more information, visit acehardware.com or newsroom.acehardware.com.

Contacts:

Shareholders'/Investors' Inquiries: William Guzik, Executive Vice President, Chief Financial Officer & Chief Risk Officer 630-990-3325, guzik@acehardware.com

Media Inquiries: Jeff Gooding, Vice President, Consumer Marketing 630-990-3600, media@acehardware.com

ACE HARDWARE CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(Unaudited, in millions) Three Months Ended Nine Months Ended September 27, September 28, September 27, September 28, 2025 2024 2025 2024 (13 Weeks) (13 Weeks) (39 Weeks) (39 Weeks)Revenues:Wholesale revenues $ 2,269.6 $ 2,149.0 $ 6,866.9 $ 6,581.5Retail revenues 213.1 203.4 663.1 623.0Total revenues 2,482.7 2,352.4 7,530.0 7,204.5Cost of revenues:Wholesale cost of revenues 1,923.7 1,835.9 5,895.2 5,678.5Retail cost of revenues 113.2 108.6 360.1 340.7Total cost of revenues 2,036.9 1,944.5 6,255.3 6,019.2Gross profit:Wholesale gross profit 345.9 313.1 971.7 903.0Retail gross profit 99.9 94.8 303.0 282.3Total gross profit 445.8 407.9 1,274.7 1,185.3Wholesale operating expenses:Distribution operations expenses 77.2 71.8 229.4 212.2Selling, general and administrative expenses 109.8 84.6 290.5 252.4Retailer success and development expenses 69.9 71.2 244.1 217.3Retail operating expenses 81.3 74.2 242.2 220.9Retail pre-opening expenses 0.7 1.1 1.6 3.8Total operating expenses 338.9 302.9 1,007.8 906.6Operating income 106.9 105.0 266.9 278.7Interest expense (14.0) (11.8) (42.0) (36.1)Interest income 1.7 1.7 5.0 5.0Other income, net 6.9 2.8 19.5 11.1Income tax (expense) benefit (1.8) 1.3 (0.3) 1.6Net income 99.7 99.0 249.1 260.3Less: net loss attributable to noncontrolling interests (0.5) (0.2) (1.3) (0.9)Net income attributable to Ace Hardware $ 100.2 $ 99.2 $ 250.4 $ 261.2CorporationPatronage distributions accrued $ 122.1 $ 105.4 $ 294.2 $ 291.2Patronage distributions accrued for third party $ 117.0 $ 100.1 $ 279.1 $ 276.0RetailersACE HARDWARE CORPORATIONCONSOLIDATED BALANCE SHEETS(In millions, except share data) September 27, December 28, September 28, 2025 2024 2024Assets (Unaudited) (Audited) (Unaudited)Cash and cash equivalents $ 37.7 $ 36.3 $ 38.9Marketable securities 44.6 42.7 48.6Receivables, net of allowance for doubtful accounts of $16.3, $10.9 775.6 727.8 772.3and $11.1, respectivelyInventories 1,297.7 1,197.9 1,299.5Prepaid expenses and other current assets 100.0 87.3 93.3Total current assets 2,255.6 2,092.0 2,252.6Property and equipment, net 719.1 594.6 589.0Operating lease right-of-use assets, net 767.0 798.2 814.4Finance lease right-of-use assets, net 161.7 185.7 127.6Goodwill and other intangible assets, net 467.2 455.6 445.6Other assets 196.9 166.7 165.7Total assets $ 4,567.5 $ 4,292.8 $ 4,394.9Liabilities and EquityCurrent maturities of long-term debt $ 92.7 $ 80.6 $ 64.3Accounts payable 1,241.9 1,215.2 1,231.4Patronage distributions payable in cash 114.6 137.2 112.9Patronage refund certificates payable 15.0 15.0 29.0Current operating lease liabilities 114.2 94.4 91.3Current finance lease liabilities 45.2 37.9 29.5Accrued expenses 294.8 313.1 284.9Total current liabilities 1,918.4 1,893.4 1,843.3Long-term debt 503.7 246.5 432.1Patronage refund certificates payable 258.8 205.8 202.5Long-term operating lease liabilities 682.4 728.4 742.1Long-term finance lease liabilities 115.3 145.0 100.3Other long-term liabilities 175.2 151.8 143.6Total liabilities 3,653.8 3,370.9 3,463.9Member Retailers' Equity:Class A voting common stock, $1,000 par value, 10,000 shares 2.6 2.6 2.6authorized, 2,590, 2,586 and 2,586 issued and outstanding,respectivelyClass C nonvoting common stock, $100 par value, 20,000,000 shares 787.0 752.9 764.1authorized, 7,870,016, 7,528,693 and 7,641,370 issued andoutstanding, respectivelyClass C nonvoting common stock, $100 par value, issuable to retailers 67.9 82.5 73.0for patronage distributions, 678,763, 825,206 and 730,428 sharesissuable, respectivelyContributed capital 18.8 19.3 19.2Retained earnings 30.4 58.5 64.1Accumulated other comprehensive income (loss) 0.4 (1.9) (0.3)Equity attributable to Ace member retailers 907.1 913.9 922.7Equity attributable to noncontrolling interests 6.6 8.0 8.3Total equity 913.7 921.9 931.0Total liabilities and equity $ 4,567.5 $ 4,292.8 $ 4,394.9ACE HARDWARE CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, in millions) Nine Months Ended September 27, September 28, 2025 2024 (39 Weeks) (39 Weeks)Operating ActivitiesNet income $ 249.1 $ 260.3Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 82.3 73.7Non cash lease expense 33.4 22.8Amortization of deferred financing costs 0.7 0.7(Gain) loss on the disposal of assets, net (0.3) 0.8Provision for doubtful accounts 8.0 0.6Other, net 7.8 (6.8)Changes in operating assets and liabilities, exclusive of effects of acquisitions:Receivables (118.4) (127.8)Inventories (96.7) (51.1)Other current assets (15.0) (23.4)Other long-term assets (4.5) (9.9)Accounts payable and accrued expenses 30.3 167.6Other long-term liabilities 22.9 18.3Deferred taxes (2.3) (2.0)Net cash provided by operating activities 197.3 323.8Investing ActivitiesPurchases of investment securities (9.0) (20.8)Proceeds from sale of investment securities 6.0 22.4Purchases of property and equipment (201.9) (121.1)Cash paid for acquired businesses, net of cash acquired (15.5) (45.1)Increase in notes receivable, net (17.7) (26.7)Proceeds from sale of assets 0.7 0.6Other, net (0.7) 0.9Net cash used in investing activities (238.1) (189.8)Financing ActivitiesNet borrowings under revolving lines of credit 265.7 81.8Principal payments on long-term debt (15.1) (13.9)Principal portion of finance lease payments (36.2) (25.2)Payments of cash portion of patronage distribution (137.8) (137.1)Payments of patronage refund certificates (28.7) (22.9)Repurchase of stock (6.8) (10.4)Purchase of noncontrolling interests (1.1) (0.5)Other, net 2.2 1.2Net cash provided by (used in) financing activities 42.2 (127.0)Increase in cash and cash equivalents 1.4 7.0Cash and cash equivalents at beginning of period 36.3 31.9Cash and cash equivalents at end of period $ 37.7 $ 38.9Supplemental disclosure of cash flow information:Interest paid $ 37.9 $ 29.7Income taxes paid $ 1.9 $ 3.3

https://mma.prnewswire.com/media/695157/Ace_Hardware_Logo.jpg

https://edge.prnewswire.com/c/img/favicon.png?sn=CG21990&sd=2025-11-12

View original content to download multimedia:https://www.prnewswire.com/news-releases/ace-hardware-reports-third-quarter-2025-results-302612405.html

SOURCE Ace Hardware Corporation

https://rt.newswire.ca/rt.gif?NewsItemId=CG21990&Transmission_Id=202511120904PR_NEWS_USPR_____CG21990&DateId=20251112