Ace Hardware builds an Amazon-proof business
Investments in supply chain and digital are helping Ace Hardware attract shoppers and increase sales and profit.
The hardware retailer reported record second quarter revenues of $1.59 billion, an increase of $95.5 million, or 6.4 percent, from the second quarter of 2017. Net income was $54.8 million for the second quarter of 2018, an increase of 7.2 percent from the second quarter of 2017. Same store sales were up 3.3%.
"We continued to see revenue growth across all of our business units in the second quarter, with the strongest results coming from our local owners in the domestic business which increased almost 6.0 percent," said John Venhuizen, President and CEO. "And I'm delighted with our 7.2 percent net income growth despite the expense pressures from our material investments in both our wholesale infrastructure and our digital expansion. We successfully shipped our first order from our new 1.1 million square foot Fredericksburg retail support center on June 4th and launched our new hyper-localized Acehardware.com website on July 30th, which was up 34 percent in the second quarter."
Venhuizen told FOX Business earlier this month that the company is having success taking on Amazon.
“Don’t misunderstand. We all know Amazon is the most disruptive company in human history,” he told Stuart Varney. “But there is a desire of ours to be owning the home preservation business — and a lot of that has to do with feel and touch. And we are sort of blessed that tends to be a little bit more insulated from the convenience of commoditized one-click ordering," he said.
Ace Hardware opened a new distribution center in Virginia on June 4 and launched a new website in July.
Ace opened 39 new domestic stores in the second quarter and closed 34 stores. The company's total domestic store count was 4,423 for the second quarter, which was an increase of 66 stores from the second quarter of 2017. On a worldwide basis, Ace added 59 stores in the second quarter of 2018 and cancelled 35, bringing the worldwide store count to 5,161 at the end of the second quarter of 2018.