Financial Reports: Lowe’s, Ace Hardware, Brightview
Lowe’s reports soft DIY demand, growth in Pro
On Nov. 19, Lowe’s reported its third quarter 2024 financials (for the quarter ended Nov. 1, 2024). Total sales for the quarter were $20.2 billion, down slightly from $20.5 billion in the prior-year quarter. Comparable sales for the quarter decreased 1.1%, driven by continued softness in DIY bigger-ticket discretionary demand, which was partly offset by storm-related sales and positive comparable sales in Pro and online.
“Our results this quarter were modestly better-than-expected, even excluding storm-related activity, driven by high-single-digit positive comps in Pro, strong online sales and smaller-ticket outdoor DIY projects,” said Marvin R. Ellison, Lowe’s chairman, president and CEO. “I’d like to extend my heartfelt sympathy to those who suffered losses from Hurricanes Helene and Milton. I would also like to express my appreciation for our associates, suppliers and first responders for their commitment to the impacted communities. Next month at our Analyst and Investor Conference, I look forward to discussing our new growth and productivity initiatives, which underscore our confidence that we are well-positioned to capitalize on the expected recovery in home improvement.”
As of Nov. 1, 2024, Lowe’s operated 1,747 stores representing 195.0 million square feet of retail selling space.
Lowe’s Full Year 2024 Outlook
- Total sales of $83.0 to $83.5 billion (previously $82.7 to $83.2 billion)
- Comparable sales expected to be down -3.0 to -3.5%, as compared to prior year (previously down -3.5 to -4.0%)
- Adjusted operating income as a percentage of sales (adjusted operating margin) of 12.3 to 12.4% (previously 12.4 to 12.5%)
- Net interest expense of approximately $1.3 billion (previously $1.4 billion)
- Adjusted effective income tax rate of approximately 24.5%
- Adjusted diluted earnings per share of approximately $11.80 to $11.90 (previously $11.70 to $11.90)
- Capital expenditures of approximately $2 billion
Ace Hardware store revenues down, corp. revenue up
On. Nov. 13, Ace Hardware Corp. reported third quarter 2024 revenues of $2.4 billion, an increase of $64.8 million, or 2.8 percent, from the third quarter of 2023. The company’s net income was $99.0 million for the third quarter of 2024, a decrease of $31.0 million from the third quarter of 2023. This decrease was due entirely to higher planned expenses as Ace continues to make strategic investments in its supply chain infrastructure and digital marketing expense to support future growth.
The approximately 3,700 Ace retailers who share daily retail sales data reported a 2.2 percent decrease in U.S. retail same-store-sales during the third quarter of 2024, which was the result of a 2.2 percent decrease in same-store transactions; partially offset by a 0.1 percent increase in average ticket.
“In this challenging environment, it’s encouraging for me to report growth in new stores, growth in our digital business, and overall growth to $2.4 billion for the quarter,” said John Venhuizen, Ace president & CEO. “I’m never particularly pleased to report a decline in net income, but it was almost exactly on plan and nearly $100 million for the three-month period. It’s a privilege to take the field with such a talented Ace team around the world.”
Ace Revenues
Total wholesale revenues were $2.1 billion, an increase of $56.3 million, or 2.7 percent, as compared to the prior year third quarter. Increases were seen across many departments with grilling, power tools and outdoor power equipment showing the largest gains.
Wholesale merchandise revenues to new domestic stores activated from January 2023 through September 2024 contributed $57.6 million of incremental revenues during the third quarter of 2024, while wholesale merchandise revenues decreased $7.2 million during the third quarter due to domestic stores whose memberships were cancelled. Wholesale merchandise revenues to comparable domestic stores decreased $18.9 million for the quarter.
The Company’s total domestic store count was 5,093 at the end of the third quarter of 2024, which was an increase of 150 stores from the third quarter of 2023. The worldwide store count was 5,973 at the end of the third quarter of 2024.
Ace Gross Profit
Wholesale gross profit for the three months ended September 28, 2024 was $313.1 million, a decrease of $5.8 million from the third quarter of 2023. The wholesale gross margin percentage was 14.6 percent of wholesale revenues in the third quarter of 2024, down from 15.2 percent in the third quarter of 2023. The decrease in wholesale gross margin percentage was primarily driven by unfavorable product gross profit rates and a decrease in LIFO income from the third quarter of 2023 when certain vendor prices declined.
Retail gross profit for the three months ended September 28, 2024 was $94.8 million, an increase of $5.0 million from the third quarter of 2023. The retail gross margin percentage was 46.6 percent of retail revenues in the third quarter of 2024, up from 46.1 percent in the third quarter of 2023.
Brightview revenue drops
On Nov. 13, Brightview reported unaudited results for the three months and full fiscal year ended September 30, 2024.
- Fourth quarter total revenue decreased 2.0% year-over-year to $728.7 million.
- Fourth quarter net income increased 56.1% year-over-year to $25.6 million; Net income margin expanded by 10 basis points.
- Fourth quarter Adjusted EBITDA increased 3.5% year-over-year to a fourth quarter record $105.2 million; Adjusted EBITDA margin expanded by 70 basis points.
For the three months ended September 30, 2024, total revenue decreased 2.0% to $728.7 million, from $743.7 million in the 2023 period. The decrease was driven by a decrease in Maintenance Services revenues of $34.5 million, partially offset by an increase in Development Services revenues of $19.4 million as discussed further below in Segment Results.
“Fourth quarter results reconfirmed the delivery of a breakout year in fiscal 2024 as we continue to transform this business. Our One BrightView culture is gaining traction, and we are positioned for fiscal 2025 to be a second consecutive record year,” said BrightView President and Chief Executive Officer Dale Asplund. “Our multi-faceted transformation has positioned us to prioritize our employees and customers and reinvest in our business, ultimately leading to sustainable growth and value creation for all of our stakeholders.”
For the three months ended September 30, 2024, Adjusted EBITDA increased 3.5% to $105.2 million, from $101.6 million in the 2023 period. The increase was driven by an increase in Development Services EBITDA of $12.1 million, partially offset by a decrease in Corporate EBITDA driven by the prior year disposal of corporate assets.
For the fiscal year ended September 30, 2024, total revenue decreased 1.7% to $2,767.1 million, from $2,816.0 million in the 2023 period. The decrease was driven by a decrease in Maintenance Services revenues of $102.5 million, partially offset by an increase in Development Services revenues of $50.8 million, as discussed further below in Segment Results.
For the fourth quarter of fiscal 2024, revenue in the Maintenance Services Segment decreased by $34.3 million, or 6.6%, from the prior year. The decrease was driven by a shortfall in underlying commercial landscape services, underpinned by strategic reductions of non-core businesses and to a lesser extent reduced ancillary services.
For the fourth quarter of fiscal 2024, revenue in the Development Services Segment (including Construction and Design-Build work) increased by $19.4 million, or 8.6%, compared to the prior year. The increase was driven by an increase in Development Services project volumes.
