Message to Shareholders: John Venhuizen

A message from the President & CEO

John Venhuizen, President & CEO

Dear Ace Shareholders,

2024 was an extraordinary year for Ace Hardware, marked by record achievements and a few challenges that remind us of the relentless pursuit required to remain at the top. I’m delighted to report three significant records for the company. Our revenue achieved an all-time high of $9.5 billion, a reflection of your $23.5 billion in retail revenues. Though net income declined by 2.9%, shareholder dividends set a record at $357 million, which yields a 39% pre-tax return on the equity you have in Ace. Since 2013, we’ve returned an impressive $2.66 billion to you, our shareholders. And we contributed $25 million to the Ace Foundation, a testament to the steel spine and soft heart of Ace nation.

This past year, Ace was also honored as the 5th largest and 5th best franchise in the world, as well as the 5th most trustworthy company in America. These accolades don’t happen by accident. They are a direct result of our collective and nearly irrational pursuit of serving others well; first to our people and then for our neighbors.

Our Primary Business Units

The health of Ace Domestic is rooted in the health of our retailers and the communities they serve. Despite a modest 0.6% increase in same-store sales within the hardware format (-0.3% when you include lumber), we achieved many milestones worthy of note:

We expanded our reach by opening 215 new stores and completing 493 projects across the country. This growth creates jobs, strengthens local economies, and expands the Ace brand to even more communities.
Our digital footprint continued its advance, with site visits soaring to 408 million, online revenue climbing 15%, and omni-revenue jumping to $2.2 billion. The Ace Hardware app, a shining example of American innovation, experienced a remarkable 45% growth in revenue.
Retailer fill rates improved by 481 basis points, and we celebrated 18 consecutive months of product cost deflation. These improvements empower our store owners to better serve their customers and thrive in a competitive marketplace.
Pinnacle performing retailers once again outperformed their peers with double the same-store gross profit increase. Perennial Pinnacle performers have achieved compounded annual same-store sales growth of 5.9% over the last eight years, to achieve average revenue per store of over $3.8 million.

Ace Retail Holdings hit a revenue milestone of $825 million (up 5%) while simultaneously removing 260,000 labor hours from stores and improving Top Box OSAT to 87%. Cash flow, before start-up expenses and the management fee we inflict upon them, hit 7.6% of revenue.

In wholesale distribution, Emery Jensen Distribution achieved a 4.8% increase in revenue to $480 million, with $8.9 million in pre-management fee EBIT. Meanwhile, Ace International saw a modest decline of 0.5% to $215 million in revenue but delivered $8.8 million in improved cash flow. And our growing Ace Home Services business posted revenue growth of 37% to $172 million, although profitability remains a focus for improvement with EBITDA at a mere $1.2 million. While earnings remain under target, we are confident in the immense potential of this segment to provide essential services to American homeowners and create new opportunities for skilled tradespeople. Ace Handyman Services finished quite strong with comp sales up 5.6% for the year.

A Hope-Filled and Purpose-Driven Mission

We firmly believe that our business exists not merely to sell hardware but to serve people. Our work is fueled by a profound sense of purpose: to improve lives, inspire entrepreneurs, and uplift communities. From job creation to esteem building to wealth creation, small businesses like yours remain one of the greatest forces for good the world has ever known.

As we look to the future, we remain committed to our mission of being the most helpful hardware stores on the planet. We will continue to invest in our people, our communities, and our innovative spirit. We will strive to be a beacon of hope, a symbol of American ingenuity, and a source of pride for all who are a part of the Ace team.

Helpful is our weapon in the world. Thank you for wielding it with such grace and conviction.