The following is a summary of the Richelieu Hardware Ltd. (RHUHF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 sales growth was 1.9%, totalling $407 million, bolstered by strong U.S. manufacturer market performance and acquisitions.

• Canadian sales declined by 2% due to a decrease in retail sectors, totaling $265 million.

• U.S. sales increased by 4.8% to $148 million, largely driven by manufacturer sales.

• EBITDA of $53 million, down 13.2% year-over-year, with margins pressured by higher costs and expansion initiatives.

• Net earnings were down 23.9% to $22.7 million; earnings per share decreased to $0.41 from $0.53.

• Operating cash flow decreased to $50.2 million from $104.8 million in the previous year.

Business Progress:

• Continued optimization by consolidating centers in New York and West Florida.

• $42.4 million invested in acquisitions and expansion, including a new Calgary location.

• Pursued a significant acquisition strategy, with four new agreements in North America, aiming for notable future growth.

Opportunities:

• The ongoing housing shortage in North America presents substantial growth opportunities for Richelieu, particularly in the R&R market expected to recover soon.

Risks:

• The downturn in the hardware retailer and renovation superstore markets continued, impacting total revenue growth and profit margins.

• EBITDA and margin pressures are likely to persist short-term amid market recovery uncertainties and ongoing costs from new business acquisitions and expansion.

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