Richelieu Hardware (RCH) Q3 2024 earnings summary

Executive summary

• Q3 sales grew 1.9% year-over-year, reaching CAD 407 million or $467.7M, driven by strong US manufacturer sales and acquisitions, while sales to retailers and renovation superstores declined.

• US market performance was robust, with sales up 7.5% in US dollars, mainly from acquisitions.

• Net income attributable to shareholders was CAD 22.7 million ($0.41 per diluted share), down 23.9% from Q3 2023.

• Q3 EBITDA was CAD 53 million (11.3% margin), a 13.2% decrease year-over-year.

• Four new acquisition agreements were signed in Q3, with ongoing integration of three prior acquisitions.

Financial highlights

• Q3 sales reached CAD 407 million ($467.7M), up 1.9% year-over-year; Canadian sales declined 2%, while US sales grew 4.8%.

• Nine-month sales totaled CAD 1.4 billion ($1.36B), up 1.6%; EBITDA was CAD 147.2 million (10.9% margin), down 14.2%.

• Net income for nine months: $61.4M ($1.09 per diluted share), down 26.0% year-over-year.

• Cash flow from operating activities in Q3 was CAD 50.2 million, down from CAD 104.8 million last year.

• Adjusted cash flows from operating activities: $42.7M in Q3, $122.7M for nine months.

Outlook and guidance

• Four new acquisitions expected to close by year-end or early 2025, adding CAD 40 million to CAD 60 million in annual revenue.

• Management expects market recovery in coming months, with optimism for improved performance as housing shortages persist.

• Sectors like kitchen cabinets, closets, and commercial renovations are seen as key growth drivers.

• Margin improvement in Q4 is expected to be slight unless market conditions recover significantly.