Q3 2024 Richelieu Hardware Ltd Earnings Call Transcript
Key Points
- Richelieu Hardware Ltd (RHUHF) achieved a total sales growth of 1.9% in the third quarter, driven by a strong performance in the US manufacturers market with a 7.5% increase in sales.
- The company maintained a solid financial position with a working capital of $632 million and a current ratio of 3.5 to 1, while holding almost no debt.
- Richelieu Hardware Ltd (RHUHF) is pursuing an acquisition strategy, with agreements in principle for four new acquisitions, which are expected to add $40 million to $60 million in revenue.
- The company is optimistic about future growth opportunities, particularly in the Latin American housing market and the expected recovery of the renovation and remodeling market.
- Richelieu Hardware Ltd (RHUHF) continues to benefit from a strong market positioning, a robust network, and a distinctive service offering appreciated by customers.
- Sales to hardware retailers and renovation superstores decreased significantly, with a 13.4% drop in the third quarter.
- EBITDA for the third quarter decreased by 13.2% compared to last year, with margins under pressure due to temporary factors such as higher inventory costs and lower selling prices.
- Net earnings attributable to shareholders fell by 23.9% in the third quarter, primarily due to amortization associated with new business acquisitions and expansion projects.
- Cash flow from operating activities decreased significantly, with a cash inflow of $50.2 million in the quarter compared to $104.8 million in the previous year.
- The company faces ongoing challenges in the retailer and renovation superstore market due to price deflation and lower demand, impacting overall sales performance.
(audio in progress) Third quarter results conference call. (Operator Instructions) Also note that this call is being recorded on October 10, 2024. (spoken in foreign language)
Merci. Thank you. Good afternoon, ladies, and gentlemen, and welcome to Richelieu's conference call for the third quarter and first nine months ended August 31, 2024. With me is Antoine Auclair, CFO. As usual, note that some of today's issues include forward-looking information which is provided with the usual disclaimer as reported in our financial filings.
Overall, we had a good third quarter where we achieved sales growth and maintained a healthy and solid financial position, considering the soft demand in the R&R and the new housing market. Total sales growth for the quarter reached 1.9%, partially fueled by our strong performance in the US manufacturers market where sales increased by 7.5% in US dollar, driven by the significant impact of our acquisitions.
As for the retailer
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