Richelieu Hardware Q4 Earnings Call Highlights

Richelieu Hardware (TSE:RCH) reported fourth-quarter and full-year results for the period ended November 30, 2025, highlighting higher sales, improved EBITDA, and stronger operating cash flow, alongside an active acquisition year that management said further supports the company’s one-stop-shop strategy in North America.

Fourth-quarter results: sales up, EBITDA margin improved

For the fourth quarter, Richelieu posted sales of CAD 511 million, an increase of 7.3%. EBITDA rose 9.1% to CAD 59.2 million, while the EBITDA margin improved to 11.6% from 11.4% in the prior-year quarter. Gross margin was described as stable.

Net earnings attributable to shareholders were CAD 25.6 million, up from CAD 24.4 million a year earlier. Diluted earnings per share rose to CAD 0.46 from CAD 0.44, an increase of 4.5%.

Operating cash flow in the quarter was CAD 68.7 million versus CAD 27.2 million in the fourth quarter of 2024, driven in part by a cash inflow from working capital. CFO and COO Antoine Auclair said the net change in non-cash working capital balances represented a cash inflow of CAD 20.4 million, driven by a CAD 30.1 million reduction in inventories.

Segment and regional performance

Sales to manufacturers in the quarter totaled CAD 459.9 million, up 9.1%, including 5.9% internal growth and 3.2% from acquisitions, management said. By contrast, sales in the hardware retailers and renovation superstores market declined 6.4% in the quarter.

In Canada, fourth-quarter sales were CAD 282 million, up 2.5%. Sales to manufacturers reached CAD 241 million, an increase of 4.6%. Retailer and renovation superstore sales totaled CAD 41 million, down 10.7% for the quarter, which management attributed mainly to timing differences and one customer not placing orders for seasonal sales. Management said year-to-date retailer sales in Canada were in line with last year.

In the U.S., fourth-quarter sales totaled $164 million, up 12.3%. Sales to manufacturers were $157 million, an increase of 12.9%, including 8.8% internal growth that Auclair said was mainly driven by price increases. Sales in the retailer market increased 1.4%.

On a reported basis, U.S. fourth-quarter sales reached CAD 229 million, up 13.9%, and represented 45% of total quarterly sales.

Full-year results and cash returns to shareholders

For fiscal 2025, Richelieu reported total sales of CAD 1.96 billion, up 7.2%. Management said the increase reflected 3.2% from acquisitions and 4.0% from internal growth. EBITDA increased 6.2% for the year, while net earnings reached CAD 86 million, or CAD 1.55 per diluted share, compared with CAD 1.53 the prior year, an increase of 1.3%.

Operating cash flow for the year was CAD 202.4 million, up from CAD 133.6 million last year. The company said it ended the year with a positive cash position, almost no debt, and working capital of CAD 622 million.

Auclair said Richelieu paid CAD 34 million in dividends during the year, representing a payout ratio of 37.5%, and repurchased CAD 16 million of common shares, including CAD 13 million in the fourth quarter. In total, the company returned CAD 50 million to shareholders.

Investing activities used CAD 62 million of cash flow, including CAD 47.1 million for nine business acquisitions completed during the fiscal year and CAD 15.2 million primarily for equipment purchases intended to maintain and improve operational efficiency.

Acquisitions expand private brands and distribution footprint

Management emphasized that acquisitions remained a central part of the company’s strategy. During the fourth quarter, Richelieu closed Ideal Security in September, followed by Finmac Lumber and Klassen Bronze in October.

• Ideal Security (Greater Montreal area) distributes specialized hardware products for the doors and window market, serving hardware retailers, renovation superstores, and online retail platforms.
• Finmac Lumber (Winnipeg) is a specialized wood product distributor serving Western Canada.
• Klassen Bronze (Ontario) provides letter and number products, signs, mailboxes, key blanks, and key cutting machines for hardware retailers and renovation superstores.

CEO Richard Lord said the company was “very pleased” with the Ideal and Klassen transactions, noting they expand Richelieu’s portfolio of private brands for the retailer and renovation superstore market to 10. Management said private brands and exclusive products remain a key differentiator and account for a significant proportion of sales, supporting customer loyalty and the company’s margin profile.

Lord also said that over the past 13 months the company completed 10 acquisitions in Canada and the U.S., representing approximately CAD 100 million in additional sales. He added that an acquisition completed after year-end—three McKillican American distribution centers in Portland, Oregon, and Seattle and Spokane, Washington—would bring Richelieu’s historical total to 100 acquisitions. The centers are already integrated into the company’s IT system, and the Seattle operations have been moved to Richelieu’s current Seattle distribution center. Lord said the deal strengthens the distribution network and expands product and service offerings, resulting in five locations across the Pacific Northwest.

Outlook commentary: early Q1 trends, margins, inventory, and M&A

On early fiscal 2026 trends, Lord told analysts that first-quarter sales so far were flat in the hardware retailers market, while the manufacturers market was growing “something around 5%.” He added that the U.S. was showing “a little bit more growth” than Canada by a couple of percentage points.

Asked about EBITDA margin trajectory, Auclair said the last two quarters were positive versus the prior year and that the trend “should continue,” while cautioning that the first quarter is typically the lowest of the fiscal year due to seasonality. He said the company should be “slightly north of 11%” on an annual basis, adding that acquisition mix can influence the pace of margin improvement.

On the retailers pullback in the quarter, management pointed to a flat market backdrop and timing issues in Canada, including one customer delaying seasonal orders. Lord also said Richelieu has been reintroducing products into stores and cited new products with Rona, as well as initiatives with Home Hardware and Home Depot in Canada. In the U.S., Lord said the company regained business it had lost with Lowe’s, which he said could add $10 million to $12 million in sales, with deliveries expected to ramp through the end of the second quarter and into the third quarter.

Regarding inventory and cash flow, Auclair said the inventory reduction was aligned with earlier expectations, noting he had previously targeted a CAD 20 million to CAD 30 million reduction and that the company achieved CAD 33 million. He said further inventory optimization efforts are planned in 2026, though he does not expect a reduction as large as fiscal 2025. Auclair also noted capital spending has returned to what he characterized as a more maintenance-level phase.

On tariffs affecting customers, Lord said customers were “very happy” about a pause on additional tariffs, while noting they still had to contend with an initial 25% level. He said some Canadian customers selling into the U.S. were losing sales and reducing employees, though Richelieu may see some offsetting effects where customers shift sourcing from overseas to Richelieu. He also said Richelieu could recapture some business in the U.S. through customers gaining share in that market.

Finally, on M&A expectations, Lord said the company remains committed to the pace it previously discussed, reiterating a target of CAD 100 million a year in acquisitions and describing the pipeline as healthy in both Canada and the U.S.

About Richelieu Hardware (TSE:RCH)

Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company’s sales are derived from its operations in Canada. Richelieu’s products include furniture, glass, decorative, window, and door hardware, lighting systems, and kitchen and closet storage. The firm primarily serves home furnishing manufacturers, residential and commercial woodworkers, hardware retailers, and renovation superstores.