Richelieu Hardware Q1 Earnings Call Highlights

Key Points

• Sales and earnings: Quarterly sales rose 5% to CAD 463.6 million (2% internal, 3% from acquisitions) and would have been 7% excluding a CAD 1.6 million FX headwind; Q1 EBITDA was CAD 43.2 million (+1.9%) and diluted EPS was CAD 0.26.
• M&A-driven growth: Richelieu completed the acquisition of three McKillican distribution centers, has two LOIs, and expects roughly ±CAD 100 million of revenue from M&A plus a potential ~$10 million/year Lowe’s opportunity later in the year.
• Outlook and balance sheet: Management targets an EBITDA margin around 11% for 2026 (longer-term 12–13%), and says the company finished the quarter with strong cash flow, working capital of CAD 625.7 million and “almost no debt.”

Richelieu Hardware TSE: RCH reported higher first-quarter sales and earnings while navigating foreign exchange headwinds and a softer performance in its Canadian hardware retail channel, according to executives on the company’s earnings call for the quarter ended Feb. 28, 2026.

Sales rise 5% as acquisitions and internal growth contribute

President and CEO Richard Lord said the company “maintained our growth momentum with good results” and highlighted continued acquisition activity following what he described as “a strong year of acquisitions in 2025.” Lord noted the company completed its first acquisition of 2026 in December, adding three McKillican American distribution centers in Oregon and Washington, and that Richelieu signed two letters of intent for potential acquisitions in Canada.

Quarterly sales increased 5% to CAD 463.6 million, with growth comprised of 2% internal growth and a 3% contribution from acquisitions, management said. Lord added that excluding the impact of the Canadian dollar’s appreciation against the U.S. dollar, sales growth would have been 7%.

Sales to manufacturers rose 6% to CAD 408.2 million, supported by performance in both Canada and the U.S., while acquisitions accounted for 3% of total sales growth, according to Lord.

Mixed performance across market segments and geographies

Richelieu’s hardware retailers and renovation superstores channel declined 1.9% year over year to CAD 55.4 million. Lord attributed the drop to a slowdown in Canada, where sales in that channel fell 6%, while U.S. sales in the segment rose 21% in U.S. dollars.

On a geographic basis, the company reported:

• Canada sales: CAD 249.8 million, up 3.4%. Sales to manufacturers were CAD 206.3 million, while hardware retailers and renovation superstores sales were CAD 43.5 million, down 6%.
• U.S. sales: $155.6 million in U.S. dollars, up 11.3%, reflecting 6.4% internal growth and 4.9% from acquisitions. In Canadian dollars, U.S. sales were CAD 214 million, up 6.8%, representing 46% of total sales.

Profitability: FX and tariffs pressure margins, EBITDA dollars grow

First-quarter EBITDA rose 1.9% to CAD 43.2 million. Management said results were affected by a CAD 1.6 million negative foreign exchange impact from currency fluctuations. EBITDA margin was 9.3%, down from 9.6% a year earlier.

Lord said EBITDA increased 1.9% but “would have been up 5.6% if we exclude the FX impact,” adding that the EBITDA margin was “slightly higher than last year” on that basis.

During the Q&A, management also addressed the effect of tariffs on the margin rate. The company said it intends to pass through the tariff dollars, meaning “no impact on the EBITDA dollar,” but management said tariffs do affect the EBITDA margin percentage. In response to an analyst question, management quantified the tariff-driven impact as 0.2 (interpreted in the discussion as about 20 basis points).

Net earnings attributable to shareholders were CAD 14.4 million, up 3.6% year over year. Diluted earnings per share increased to CAD 0.26 from CAD 0.25.

Cash flow, balance sheet, and investment activity

Cash flow from operating activities before changes in non-cash working capital was CAD 37.9 million, or CAD 0.69 per diluted share. Working capital changes used CAD 21 million, which management said mainly reflected “the increase in inventories,” described as a normal seasonal fluctuation for the period.

Operating activities provided a CAD 17.1 million cash inflow, compared with CAD 3.7 million in the prior-year quarter. The company paid CAD 8.6 million in dividends and invested CAD 13.2 million, including CAD 10 million for a business acquisition and CAD 3.2 million in capital expenditures.

CFO and COO Antoine Auclair said the company ended the quarter with working capital of CAD 625.7 million and “almost no debt,” describing the financial position as “healthy and solid.”

Outlook themes: early Q2 trends, margin expectations, and M&A pipeline

Asked about second-quarter trends, Lord said the market remained “still very good,” and management added that March was “pretty aligned with what you’ve seen in the first quarter,” with growth continuing into early April. Lord pointed to regional differences in Canada, saying Eastern Canada had strong momentum and that the Ontario market was weaker, stating, “We’re down by 4%, the Ontario market, while the Western Canada is up by 3%.”

Management also discussed pricing versus volume. According to the company, growth in the U.S. was “pretty much price increase driven,” while in Canada the mix was “50/50 price increase and volume.”

On EBITDA margins, management reiterated that the first quarter is typically the softest period and said EBITDA should increase in the next three quarters. The company said margins in Q2 through Q4 should be “similar or slightly higher than last year,” and referenced having delivered 10.9% last year. Management added that for 2026, EBITDA margin “should be around the 11% mark,” while longer-term it is “heading for” 12% to 13%.

On acquisitions, Lord said the company was integrating recent deals efficiently and continued to see opportunity in a “highly fragmented” U.S. market. He said the M&A pipeline was “healthy,” and reaffirmed expectations for roughly ± CAD 100 million in added revenue through M&A. Lord also noted Richelieu expected to “gain some business with Lowe’s in the U.S.” that could represent “something like $10 million per year,” with the project expected to start in the third and fourth quarter of the year.

Lord closed the call by saying Richelieu believes it is “well-positioned with a strong offering and deep expertise” and expects to continue building for long-term value creation.

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.

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