Ace reports revenue up 3.9%, and tariffs will cause price increases
On Aug. 27, Ace Hardware Corporation reported second quarter 2025 revenues of $2.8 billion, an increase of $105.8 million, or 3.9 percent, from the second quarter of 2024. Net income was $119.1 million for the second quarter of 2025, an increase of $4.7 million from the second quarter of 2024.
Ace reported increases across most departments and said in particular that lawn and garden, and outdoor power equipment showed the largest gains, along with grilling.
Ace added 38 new domestic stores in the second quarter of 2025 and cancelled 20 stores. This brought the Company’s total domestic store count to 5,195 at the end of the second quarter of 2025, an increase of 111 stores from the second quarter of 2024.
The approximately 4,000 Ace retailers who share daily retail sales data reported a 0.8 percent decrease in U.S. retail same-store-sales during the second quarter of 2025, which was the result of a 2.1 percent decrease in same-store transactions; partially offset by a 1.3 percent increase in average ticket. Excluding lumber and building material stores, Ace stores in the traditional hardware format experienced a 0.4 percent decline in same-store-sales.
“In a macro-environment that has confounded and humbled even the best retailers, I’m delighted to report a 3.9 percent increase in revenue, a 4.1 percent jump in net income, and an 18.1 percent surge in our digital business,” said John Venhuizen, President and CEO. “I’d like to thank the Ace team for serving with dignity, decency, character, and class. They really do make Ace the helpful place.”
Gross Profit
Wholesale gross profit for the quarter ended June 28, 2025 was $362.6 million, an increase of $27.0 million from the second quarter of 2024. The wholesale gross margin percentage was 14.2 percent of wholesale revenues in the second quarter of 2025, up from 13.7 percent in the second 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 June 28, 2025 was $119.1 million, an increase of $7.3 million from the second quarter of 2024. The retail gross margin percentage was 43.3 percent of retail revenues in the second quarter of 2025, up slightly from 43.2 percent in the second 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.
Tariffs and Expenses
Recent tariffs imposed by the U.S. on companies worldwide will increase the company’s cost of goods. Ace Hardware said it intends to pass these increased costs through to its customers and expects that its customers will pass these increased costs through to consumers. At this time, Ace is unable to determine the impact this will have on revenues, results of operations and financial condition.
Wholesale operating expenses increased $29.1 million, or 11.6 percent, from the second quarter of 2024. The increase is primarily driven by planned increases in marketing, advertising and supply chain spending, and higher compensation benefit expenses. As a percentage of wholesale revenues, wholesale operating expenses increased to 11.0 percent of wholesale revenues in the second quarter of 2025 from 10.3 percent of wholesale revenues in the second quarter of 2024.
Retail operating expenses increased $5.8 million, or 7.7 percent, from the second quarter of 2024. The increase was driven by expenses related to the new stores added since the end of the first quarter of 2024. Retail operating expenses as a percentage of retail revenue increased to 29.4 percent in the second quarter of 2025 from 29.0 percent in the second quarter of 2024.
