• Record third-quarter revenues of $2.5 billion, an increase of 2.1 percent
• Record third-quarter net income of $142.1 million, an increase of 42.5 percent
• Accrued patronage distributions to shareholders of $153.6 million, an increase of 25.8 percent from the third quarter of 2025
• Ace ranked as the sixth largest franchise by Franchise Times

Ace Hardware Corporation reported third-quarter 2026 revenues of $2.5 billion, an increase of $53.3 million, or 2.1 percent, from the third quarter of 2025.  Net income was $142.1 million for the third quarter of 2026, an increase of $42.4 million from the third quarter of 2025.

“It gives me a great deal of satisfaction to once again report record sales and profit for the company,” said John Venhuizen, President and CEO. “These results belong to an Ace team comprised of some of retail’s most humble, hungry, smart, and servant-hearted people. Their collective effort drove a 12 percent increase in comparable digital sales, a 2.0 percent increase in same-store sales and an impressive 42.5 percent increase in earnings.”

Revenues

Consolidated revenues for the quarter ended October 3, 2026 totaled $2.5 billion.  Total wholesale revenues were $2.3 billion, up $53.8 million, or 2.4 percent, compared with the prior year’s third quarter.  Increases were seen across many departments, with outdoor power equipment, holiday décor, power tools, and fans and heaters showing the largest gains.

Wholesale merchandise revenues to new domestic Ace stores activated from January 2025 through September 2026 contributed $48.5 million of incremental revenues during the third quarter of 2026, while wholesale merchandise revenues decreased $8.7 million during the third quarter due to domestic Ace stores whose memberships were cancelled.  Wholesale merchandise revenues to comparable domestic Ace stores decreased $20.1 million for the quarter. The Company’s Ace International Hardware Corporation subsidiary experienced a $5.2 million increase in wholesale revenue from the third quarter of 2025.  Ace Wholesale Holdings, LLC reported a $16.4 million increase in wholesale revenues, or 10.8 percent, from the third quarter of 2025 primarily due to higher sales to hardware and pro lumber customers.  The Company’s Ace Services Holdings, LLC subsidiary, which is reported as part of the Company’s wholesale business, experienced a $4.6 million decrease in revenues from the third quarter of 2025.

Total retail revenues from Ace Retail Group, Inc. (“ARG”) for the quarter were $212.6 million, a decrease of $0.5 million, or 0.2 percent, as compared to the prior year third quarter.  ARG experienced a same-store sales decrease of 2.1 percent during the third quarter of 2026.  The new stores opened by ARG since the end of the second quarter of 2025 contributed $3.7 million of incremental revenues during the third quarter of 2026.  ARG operated 267 stores at the end of the third quarter of 2026 compared to 263 stores at the end of the third quarter of 2025.

Ace added 46 new domestic stores in the third quarter of 2026 and cancelled 22 stores.  This brought the Company’s total domestic store count to 5,307 at the end of the third quarter of 2026, an increase of 87 stores from the third quarter of 2025.

Gross Profit

Wholesale gross profit for the quarter ended October 3, 2026 was $358.5 million, an increase of $12.6 million from the third quarter of 2025.  The wholesale gross margin percentage was 15.4 percent of wholesale revenues in the third quarter of 2026, up from 15.2 percent in the third quarter of 2025.

Retail gross profit for the quarter ended October 3, 2026 was $97.9 million, a decrease of $2.0 million from the third quarter of 2025.  The retail gross margin percentage was 46.0 percent of retail revenues in the third quarter of 2026, down from 46.9 percent in the third quarter of 2025.  For ARG, retail gross profit is based on the Company’s wholesale acquisition cost of product, not ARG’s acquisition cost, which includes a markup from the Company.

Expenses and Other

Wholesale operating expenses increased $0.6 million, or 0.2 percent, from the third quarter of 2025. The increase is primarily driven by an increase in marketing and advertising spending and increased depreciation expense; partially offset by non-recurring asset impairment charges recorded during the third quarter of 2025 related to the Company’s International operations. As a percentage of wholesale revenues, wholesale operating expenses decreased to 11.1 percent of wholesale revenues in the third quarter of 2026 from 11.3 percent of wholesale revenues in the third quarter of 2025.

Retail operating expenses increased $3.2 million, or 3.9 percent, from the third quarter of 2025.  The increase was primarily driven by expenses incurred related to the new stores added since the end of the second quarter of 2025.  Retail operating expenses as a percentage of retail revenue increased to 39.7 percent in the third quarter of 2026 from 38.2 percent in the third quarter of 2025.

Other income, net, increased $30.5 million from the third quarter of 2025, primarily due to a $32.2 million refund received during the third quarter of 2026 from U.S. Customs and Border Protection related to tariffs previously paid under the International Emergency Economic Powers Act (IEEPA).

Balance Sheet and Cash Flow

Inventories increased $104.1 million from the third quarter of 2025, driven by higher sales volumes and ARG remodels and new store inventory.

Long-term debt, including current maturities, increased $5.2 million from the third quarter of 2025.  At the end of the third quarter of 2026, long-term debt consisted of $443.1 million outstanding on the revolving credit facility, $108.2 million outstanding on the ARG credit facility, and $50.3 million owed to former retailers.

About Ace Hardware

Ace Hardware is the largest hardware cooperative in the world, serving more than 9,050 locally owned and operated stores around the globe, while providing the best products, services, and operating methods to over 5,300 Ace retail stores in the United States.  Ace Hardware’s family of brands includes Ace Hardware, Emery Jensen Distribution, and independent retailers worldwide. Headquartered in Oak Brook, Ill., Ace operates an expansive network of U.S. distribution centers, along with international capabilities in Ningbo, China.  Since 1924, Ace has been a part of local communities, known as the place with the helpful hardware folks.