Richelieu Hardware (RCH) Q4 2024 earnings summary

Executive summary

• Fourth quarter sales rose 5% year-over-year to CAD 476 million, driven by strong performance in the manufacturers' market in both Canada and the US, despite a renovation market slowdown and price deflation in some commodities.

• Fiscal 2024 sales reached CAD 1.8 billion, up 2.5%, with 2.2% from acquisitions and 0.3% from internal growth.

• Seven acquisitions in 2024 and early 2025, including Panex-el, Mill Supply, Darant Distributing, Midwest Specialty Products, Olympic Forest, and four in the US, are expected to add CAD 100 million in annual sales and expand product lines.

• EBITDA margin declined due to higher inventory costs and lower selling prices in some categories.

• Leadership changes include Antoine Auclair assuming the COO role in addition to CFO, enabling greater focus on strategy and business development.

Financial highlights

• Q4 sales reached CAD 476 million, up 5% year-over-year; sales to manufacturers up 7.2%, while hardware retailers and renovation superstores declined 9.7%.

• U.S. sales in Q4 totaled $146 million (USD), up 7.1%; Canadian sales were CAD 275 million, up 2.9%.

• Full-year sales were CAD 1.8 billion, up 2.5%; Q4 EBITDA was CAD 54.3 million (margin 11.4%), down 7.7% year-over-year.

• Q4 net earnings attributable to shareholders were CAD 24.4 million (CAD 0.44 per share), down from CAD 28.5 million (CAD 0.51 per share) last year.

• Full-year net earnings were CAD 86 million (CAD 1.53 per share), down 23.1% from last year.

• Full-year adjusted cash flow from operating activities was CAD 165.7 million, down 13% year-over-year.

Outlook and guidance

• EBITDA margin target for 2025 is between 11.5% and 12%, with potential for improvement if market conditions pick up, especially in the second half of the year.

• Organic growth trends in Q1 2025 expected to mirror Q4 2024, with optimism for improvement as deflation and inventory issues subside.

• Anticipates growth opportunities from the North American housing shortage and expects the renovation market to regain momentum in 2025.

• Focus remains on kitchen cabinets, closet, storage solutions, and commercial renovation sectors.

• Quarterly dividend increased by 2.2% to CAD 0.1533 per share for Q1 2025.