Richelieu Hardware Q3 2026 Earnings Report

Richelieu Hardware EPS Results

• Actual EPS: C$0.53
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Richelieu Hardware Revenue Results

• Actual Revenue: $562.00 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Richelieu Hardware Announcement Details

• Quarter: Q3 2026
• Date: 10/8/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, October 8, 2026
• Conference Call Time: 10:00AM ET

Richelieu Hardware (TSE:RCH) 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.

Richelieu Hardware Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Third-quarter sales rose 12.6% to CAD 562 million, supported by 10% organic growth and growth across all Canadian and U.S. market segments. U.S. sales increased 15.4% in Canadian dollars and represented 46.6% of total revenue.
• Positive Sentiment: EBITDA increased 14.8% to CAD 65.5 million, while diluted EPS rose 23.3% to CAD 0.53. However, results benefited from a CAD 3 million U.S. tariff reimbursement; excluding it, EBITDA margin was 11.1% and EPS was CAD 0.49.
• Positive Sentiment: Richelieu completed or announced five acquisitions this year, adding approximately CAD 145 million in annual sales. The September acquisition of Penrod adds about USD 60 million in annual sales and seven U.S. distribution centers, although management paid roughly seven times EBITDA.
• Neutral Sentiment: Management said current internal growth has moderated to approximately 3%–4% in September and early October, compared with the stronger third-quarter performance. It expects EBITDA margins of roughly 11% in the fourth quarter and aims to maintain that level through 2027, with further expansion dependent on stronger underlying volumes.
• Positive Sentiment: Renovation demand remains healthy in residential and commercial markets, while tariffs are encouraging some furniture customers to source from Richelieu rather than import directly from Asia. The company is also investing CAD 15 million to more than quadruple its Drummondville warehouse capacity by spring 2027.

Presentation

[Operator]

Morning, ladies and gentlemen, and welcome to the Richelieu Hardware third quarter results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session, which will be restricted to analysts only. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on October 8, 2026. [Non-English content].

[Richard Lord, President and CEO at Richelieu Hardware]

[Non-English content]. Thank you. Good morning, ladies and gentlemen, and welcome to Richelieu's conference call for the third quarter and first nine months ended August 31, 2026. With me is Antoine Auclair, CFO and COO. As usual, note that some of today's issue include forward-looking information, which is provided with the usual disclaimer as reported in our financial filings. Our third quarter was marked by strong growth and strategic expansion, once again demonstrating the strength of our business model and our ability to capitalize on new opportunities. We are particularly proud of the acquisition of Penrod, the largest in our history, which we completed on September 1, following the acquisition of Solutions Acoustiques and Winnec in Canada during the third quarter.

[Richard Lord, President and CEO at Richelieu Hardware]

So far this year, our acquisition strategy has positioned us for sound future growth with a total of five acquisitions, adding $145 million in annual sales, expanding our market expertise, diversifying our specialized customer base, and providing significant additional network coverage in strategic markets. Our sustained investment in innovation, our various private label brands, our diversified market segment, and our distinctive service offering, including richelieu.com, provide us with competitive advantages that help us remain competitive in an uncertain economy. During the quarter, sales reached $562 million, with growth across all market segments in Canada and in the U.S., including initial shipments to our major U.S. retail customers. Our U.S. operation continued to be a key driver in our growth. In Canadian dollars, our U.S. sales accounted for 46.6% of total sales for the quarter.

[Richard Lord, President and CEO at Richelieu Hardware]

Sales to manufacturers in the U.S. now represent 49% of our total sales to manufacturers, highlighting the strength of our presence in this market. EBITDA was up 15% to CAD 65 million, supported by sales growth and favorable impact of a CAD 3 million refund of U.S. tariff, representing about 60 basis points to our EBITDA margin of 11.7%. Let's take a look at our most recent acquisitions. Completed in the third quarter, Solutions Acoustiques, based in the Montréal area, is renowned for its standard decorative and high-performance acoustic solutions, a growing market, and Winnec, which operates three distribution centers for specialized hardware in the greater Toronto area. on September 1st, we completed the acquisition of The Penrod Company's hardware division, adding annual sales of $60 million and seven distribution centers across the U.S.

[Richard Lord, President and CEO at Richelieu Hardware]

For us, this is an outstanding opportunity to strengthen our position with a diversified customer base of door manufacturers, architects, residential and commercial contractors, and specialty distributor. I will now ask Antoine to review the financial highlights for the quarter and the first nine months.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Thanks, Richard. In the third quarter, sales reached CAD 562 million, up 12.6% or CAD 62.8 million, driven by 10% internal growth and a 2.6% contribution from acquisitions. At comparable exchange rate, sales growth would have been 11.3%. In Canada, sales totaled CAD 300 million, up 10.2%, with strong growth from all regions. Sales to manufacturers amounted to CAD 252 million, up 11.4%, while sales to the hardware retailers totaled CAD 48 million, up 4.6%. In the U.S., sales reached $187 million, up 12.9%. Sales to manufacturers reached $172 million, up 9.3%, with 7% from internal growth. In the hardware retailers and renovation superstores market, sales reached $14.7 million, up 86.1%, mainly reflecting initial deliveries to a major customer in the U.S. In Canadian dollars, total sales in the U.S. reached CAD 262 million, up 15.4% over last year and accounting for 46.6% of total sales.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

For the first nine months, total sales reached nearly CAD 1.6 billion, up 7.2%, of which 4.6% resulted from internal growth and 2.6% from acquisition. In comparable exchange rate, sales growth would have been 7.9%. In Canada, sales reached CAD 841 million, up 6.5%, including 4.5% internal growth and 2% from acquisition. Sales to manufacturers totaled CAD 704 million, up CAD 47.7 million, or 7.3%. Sales to hardware retailers and renovation superstores were CAD 136.8 million compared to CAD 132.9 million, up 2.9%. In the U.S., sales amounted to $518 million, up 9.4%, with 3.3% from internal growth and 6.1% from acquisitions. They reached CAD 717 million, up 8%, accounting for 46% of total sales. In U.S. dollars, sales to manufacturers totaled 485 million, an increase of $37.5 million or 8.4%, driven by 5.3% internal growth and 3.1% from acquisitions.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Sales to hardware retailers and renovation superstores amounted to CAD 33 million, which represents an increase of CAD 6.9 million or 26.4%, with 20.1% coming from internal growth and 6.3% from acquisitions. Third quarter EBITDA reached CAD 65.5 million, up CAD 8.5 million, or 14.8% from last year. EBITDA margin was 11.7% compared to 11.4% last year. The slight increase reflects the impact of the reimbursement of tariffs, which represent CAD 3 million and was recorded as a reduction of cost of goods sold. Excluding this reimbursement, EBITDA margin would have been 11.1%. For the first nine months, EBITDA totaled CAD 164.8 million, up 6.5%, with the EBITDA margin at 10.6%. Third quarter net earnings attributable to shareholders reached CAD 29.2 million, up 22.4%, while diluted net earnings per share increased 23.3% to CAD 0.53 from CAD 0.43 last year.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Excluding the reimbursement of tariff, EPS would have been CAD 0.49, representing a 14.1% increase from last year. For the first nine months, net earnings attributable to shareholders reached CAD 66.9 million, up 11%. Diluted net earnings per share increased to CAD 1.21 compared to CAD 1.08 last year, up 12%. Third quarter cash flow from operating activities before net change in non-cash working capital reached CAD 54.5 million, up 13.5% from CAD 48.1 million last year. The change in non-cash working capital represented a cash inflow of CAD 4.8 million, primarily driven by a CAD 24.7 million change in accounts payable, while accounts receivable inventories and other items used CAD 19.9 million in cash. As a result, operating activities generated a cash inflow of CAD 59.4 million for the quarter.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

For the first nine months, cash flow from operating activities represented a cash inflow of CAD 95.9 million compared to CAD 133.6 million last year, when cash flows benefited from a significant reduction in inventory levels. For the third quarter, financing activities represented a cash inflow of CAD 36.9 million in cash compared to a cash outflow of CAD 25.4 million last year, primarily reflecting the addition of a long-term debt of CAD 62.4 million. For the first nine months, financing activities used cash flow of CAD 21.7 million compared to CAD 70.1 million in 2025. In the first nine months, we invested CAD 45.8 million, including CAD 31.7 million for four business acquisitions and CAD 14.1 million primarily for equipment required to maintain and improve operational efficiency, including IT equipment.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

We continue to maintain a strong balance sheet with working capital of CAD 702 million and a working capital ratio of 3.2:1.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

I now turn it over to Richard.

[Richard Lord, President and CEO at Richelieu Hardware]

Thank you, Antoine. In conclusion, I want to highlight the CAD 15 million strategic investment we announced in September at our Drummondville facility. This project, which is already underway, will more than quadruple the warehouse footprint, increasing it from 40,000 sq ft to 180,000 sq ft by spring 2027. It will support our future growth in the center of Quebec region and beyond. The economic outlook remains uncertain, but we continue to move forward with confidence. Throughout our history, we have used periods like these to strengthen Richelieu and prepare for market recovery. We are taking the same approach today, investing in innovation, expanding our market presence, and pursuing acquisition. This environment also creates opportunity for us to bring strong businesses into Richelieu network. We have the financial strength, the team, and the experience to act on these opportunities.

[Richard Lord, President and CEO at Richelieu Hardware]

We intend to keep moving forward and build on the momentum we have created.

[Richard Lord, President and CEO at Richelieu Hardware]

Thanks, everyone. We'll now be happy to answer your questions.

[Operator]

Thank you. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. If you should wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. [Non-English content]. Your first question will be from Hamir Patel at CIBC. Please go ahead.

[Hamir Patel, Analyst at CIBC]

Hi, good morning. Congrats on the strong quarter. Richard, you pointed to, in the prepared remarks, pricing driving the majority of the double-digit organic comps. How much was pricing to the organic growth percentage, and would you expect that tailwind to persist for the next three quarters?

[Richard Lord, President and CEO at Richelieu Hardware]

I think the pricing represent about 40% of the organic growth. I don't see that for the quarters to come. I think the pricing adjustment that has to be made because of the tariff, that's already behind us. There could be more pricing in the future, but that would be because of price increases from our suppliers, which we try to control at our best. Basically, in the near future, we see the pricing situation to be stable.

[Hamir Patel, Analyst at CIBC]

Okay, great. Richard, are you able to share how your sales comps in September fared for both manufacturers and retailers?

[Richard Lord, President and CEO at Richelieu Hardware]

Oh, yes. I think it's interesting to mention the different market segment by product segment. Let's say the kitchen cabinet industry, our sales in Canada increased by 5.3%, and in the U.S., 4.8%. That's the kitchen cabinet industry. That means that the consumers continue to do some renovation, because that market is related mainly to the residential market. We know that the construction is down. I guess what we see is that the sales increase is mainly due to the people doing some renovation, which is a very good market for Richelieu. The commercial renovation is also very strong in Canada, with an increase of 11%, while it is an increase of 5.5% in the U.S. Other specialized market, including the closet industry, our sales in Canada increased by 10.5%, while it has increased by 21% in the U.S. It's very encouraging to see that.

[Richard Lord, President and CEO at Richelieu Hardware]

Again, the closet industry is mainly related to the residential renovation. The door and window market will increase by 5% in Canada, 8% in the U.S. The residential furniture is interesting to mention. This is a difficult market, but we see the customer of those market segment buying more from Richelieu instead of importing their own goods from overseas because the tariff affect their sales. So they buy less, so they don't import directly from Asia anymore. That brings some business to Richelieu. Office furniture is also encouraging in Canada, our sales increased by 10%, while it's flat in the U.S. Basically, all our market segment by different industry that we serve, it's very positive to realize that there is some business there that Richelieu keeps moving by adding salespeople in the U.S. We try to keep the market moving.

[Richard Lord, President and CEO at Richelieu Hardware]

We don't stand still because the market is uncertain.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Hamir, if we look at the business as we speak, since the ending of the quarter, we are seeing internal growth of around 3%-4% as we speak.

[Hamir Patel, Analyst at CIBC]

Okay, great. Thanks, Antoine. Just to clarify, I guess all the breakdown Richard provided was for the third quarter.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Yeah, exactly.

[Hamir Patel, Analyst at CIBC]

Okay. Antoine, just thinking about EBITDA margins, look like if you exclude the tariff refunds that came in around 11.1% in Q3. What are you expecting to round out the year for Q4? Given the macro backdrop, how do you see the setup for 2027?

[Antoine Auclair, CFO and COO at Richelieu Hardware]

I'm seeing pretty much the same thing as similar quarter in Q4 regarding the EBITDA margin, so around 11%. We're working also to maintain this 11% over the course of 2027.

[Hamir Patel, Analyst at CIBC]

Okay. To drive margin expansion next year, do you really need the macro backdrop to improve?

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Yeah, we would need a more vigorous market. Sales growth is good, but real volume will definitely help to improve this EBITDA margin.

[Hamir Patel, Analyst at CIBC]

Okay, great. Just the last question I had, with respect to the Penrod deal, I guess the closing date was in Q4. Can you speak to the valuation multiple that you paid there and how the EBITDA margins of that particular target would compare to the base business, maybe relative to historical acquisitions?

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Yeah. The Penrod's EBITDA margin is similar to Richelieu, and we paid a bit more than what we usually do. But we are confident that it is a strategic acquisition for us, and we paid around 7x EBITDA.

[Hamir Patel, Analyst at CIBC]

Okay, great. That is all I had. I will turn it over. Thanks.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Thank you.

[Operator]

Once again, ladies and gentlemen, please press star one if you have any questions. Thank you. Next will be Nathan Po at National Bank. Please go ahead, Nathan.

[Nathan Po, Analyst at National Bank]

Good morning, everyone. Thank you for taking my question.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Good morning.

[Nathan Po, Analyst at National Bank]

My first question is about the EBITDA margins. Without the $3 million tariff refund, Q3 margins compressed year-over-year. What was driving the operating expenses line? Because normally with strong organic growth, like what you have posted this quarter, we would expect pricing on products and freight to be more margin accretive.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

You have to consider that we are passing the tariff as a dollar. We are not taking any margin on those tariffs. Even though the price increase is there, we are not gaining any additional margin there. In total, this has a diluting impact on the margin, not in dollars, but in percentage. I think that after Q3, this should be behind us. Now the higher cost products are in, the tariffs impact are included in our average costing as well. That should be behind us starting Q4 and moving forward.

[Nathan Po, Analyst at National Bank]

Okay. Thank you for the clarification there. On the major U.S. initial shipments, how much of that rollout was completed in Q3 and perhaps how much is left for Q4?

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Okay, so basically the initial sales to this major customer, it is around $7 million in the third quarter. On a yearly basis, we are talking about approximately $10 million on a yearly basis. So now the recurring sales will start in the course of the fourth quarter and after it is going to be business as usual for this major customer, and we are talking about $10 million annually. So approximately $2.5 million per quarter.

[Nathan Po, Analyst at National Bank]

Okay. Thank you very much for that color. Regarding the manufacturer's organic growth, notably strong, can you break down the drivers of that? Perhaps, were there any non-recurring benefits to that quarter? That is it. Just manufacturer's organic growth.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Yeah, not necessarily non-recurring. I think that it has been a strong quarter in all regions. If we look at the industrial business in the different region in Canada, so 9% growth on the East. Ontario, it was +7.8%, so this is encouraging. In Western, around 8% growth in the industrial business. Like Richard said, around 40% of this is price, the rest is volume. So we are encouraged by this performance, but as I said earlier, so if we look at September and the beginning of October, we are seeing 3%-4% growth today.

[Richard Lord, President and CEO at Richelieu Hardware]

Basically what Richelieu is doing, we create the movement in the market. We are adding salespeople. Our website is second to none. It is contributing largely to our sales increase as well. Basically all the means that we can find to reach the customers, to be close to the customers, service the customer well, and communicate well with the customers. We are investing in those segments in order to be close to our customers and getting the orders.

[Nathan Po, Analyst at National Bank]

Thank you. For the comment on early September, October internal growth, does that still match up with the commentary on 40% price and rest of those volumes, or how does that break out?

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Yeah, pretty much.

[Nathan Po, Analyst at National Bank]

Last one for me. With U.S. mortgage rates at a three-year high, can you tell us how customers and their order books are looking right now?

[Richard Lord, President and CEO at Richelieu Hardware]

Well, customers are still busy because as I mentioned earlier in this meeting, I think the renovation market remains healthy. Not strong, but healthy. People that need a new kitchen cabinet, a new closet, whatsoever. I think people that have money, they do not hesitate to make those projects. If you remember during the pandemic, people could not find a contractor to do their work. So now it's easier to find the contractors, to find kitchen cabinet manufacturers, and find furniture as well. Basically, the market is also favorable for the people that have money to spend in order to maintain their houses. That does apply to the commercial renovation market as well. When we see a growth of 11% in Canada, this is very strong. It's because of the commercial projects, the airports, the restaurants, and hotels are doing renovation. They're obliged to.

[Richard Lord, President and CEO at Richelieu Hardware]

They have to keep their place clean, and we see the tourists in Montreal and in Toronto and other areas of Canada as well. So the hotels, I think are doing very good business, and they keep renovating.

[Nathan Po, Analyst at National Bank]

Great to hear. Oh, and, sorry, one last one. I noticed that last quarter we were talking about how the Eastern market in Canada was a bit challenging, specific call-out to Ontario.

[Richard Lord, President and CEO at Richelieu Hardware]

Yeah.

[Nathan Po, Analyst at National Bank]

But you pointed out some pretty strong growth, seems like an inflection this quarter. What was driving that?

[Richard Lord, President and CEO at Richelieu Hardware]

Well, the sales in Ontario increased by 7.8%, but we have to admit that the quarter of last year was not very good. Basically it's a jump over something that was not very good last year. What we are happy to see, though, is that the Ontario market seems to have reached the bottom of the barrel, so the thing cannot be worse, and I see in the months to come that the business is going to pick up.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Yeah. Hopefully this is a trend.

[Richard Lord, President and CEO at Richelieu Hardware]

Yeah, hopefully.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

That's a good quarter, so we'll see if this continues, but like Richard said, we're comparing ourselves with low comparables. But we'll see. Hopefully, this will continue, but we don't know yet.

[Nathan Po, Analyst at National Bank]

Okay. Thank you very much. I will turn it over.

[Richard Lord, President and CEO at Richelieu Hardware]

Thank you.

[Antoine Auclair, CFO and COO at Richelieu Hardware]

Thank you.

[Operator]

At this time, [Non-English content], we have no other questions registered. Please proceed.

[Richard Lord, President and CEO at Richelieu Hardware]

There's no more questions. Thanks again. It's always a pleasure for us to talk to you. You can phone us at your convenience. Thank you. Have a good day.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your line.

Participants

Executives

• Richard Lord, President and CEO
• Antoine Auclair, CFO and COO

Analysts

• Hamir Patel, Analyst at CIBC
• Nathan Po, Analyst at National Bank