Ace Hardware posts decline in first-quarter profit

Posted May 18, 2010 at 3:40 p.m.

By Wailin Wong
Ace Hardware Corp. posted a year-on-year decline in net profit for the first quarter, as increased operating expenses and tepid consumer spending led to a decrease in sales.

The Oak Brook-based retailer reported net income of $11.8 million for the period, down 18 percent from $14.4 million in the same quarter last year. Total revenues came to $830.7 million for the quarter, a decrease of 2.4 percent from the year-earlier period. In the U.S., the soft economy meant declines in paint, hardware and plumbing sales, the company said, although the lawn and garden category saw an uptick in activity. Overseas sales were up 36.4 percent on the year, an increase Ace attributed to strong activity in the Middle East.

Meanwhile, operating expenses rose by 1.7 percent on the year to $78.5
million. Ace said it incurred higher expenses related to information

“While our overall sales results are reflective of the continued
challenging sales environment, we have several initiatives underway to
ensure we are well positioned to drive results throughout the recovery,”
Ace Chief Executive Ray Griffith said in a statement.

One of those initiatives is an agreement with Sears Holdings Corp. to
sell Craftsman tools in Ace stores. The company said it has also
expanded its number of stores selling Benjamin Moore paint.

Ace said it ended the quarter with 4,464 stores. It added 20 new stores
and cancelled 47 stores during the period.

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