Ace net income up 11.7 percent in Q2

Home Channel News, August 25, 2008

Despite soft sales, Ace Hardware reported a strong second quarter, thanks partly to good weather, expense control and stimulus checks.

"Although top-line revenues declined, we saw an improvement in sales trends from the first quarter, particularly in the latter half of the second quarter," president and CEO Ray Griffith said of the Oak Brook, Ill.-based co-op's quarterly results, which were released Aug. 12. "Second-quarter business benefited from improved seasonal weather, and the recent economic stimulus efforts appear to have helped boost consumer spending."

Ace reported net income of $33.4 million--up 11.7 percent from the $29.5 million reported last year. Total revenues were down 2.7 percent to $1.067 billion. Merchandise sales from Ace's international business continued to be strong and contributed $6.5 million in incremental sales, up 13.5 percent compared with 2007.

On a category basis, domestic revenues were negatively impacted by declines in the tools, paint, plumbing and electrical categories and were partially offset by lawn and garden sales gains.

Operating expenses decreased 10 percent, to $82.5 million in the quarter.

"We made good progress in reducing our expenses in the second quarter in light of the challenging economic environment," Griffith said. "We continue to review our cost structure and will be making the necessary adjustments to deliver strong profitability while continuing to invest in and drive the Ace brand."