Richelieu Hardware Q3 Earnings Call Highlights

Key Points

• Strong Q3 performance: Sales rose 12.6% to C$562 million, while EBITDA increased 14.8% to C$65.5 million and diluted EPS climbed 23.3% to C$0.53. Results benefited partly from a C$3 million U.S. tariff reimbursement.
• U.S. expansion accelerated: U.S. sales grew 12.9% and represented 46.6% of quarterly revenue, helped by initial deliveries to a major retail customer. Recurring sales from that customer are expected to total about US$10 million annually beginning in the fourth quarter.
• Acquisitions and pricing support growth, but pricing tailwinds will fade: Richelieu completed five acquisitions adding C$145 million in annual sales and acquired Penrod’s hardware division, which contributes about C$60 million in annual sales. Management expects internal growth of roughly 3%–4% after the quarter and a fourth-quarter EBITDA margin near 11% as tariff-related pricing benefits diminish.

Richelieu Hardware TSE: RCH reported higher third-quarter sales and earnings as growth across its Canadian and U.S. markets, acquisitions and initial deliveries to a major U.S. retail customer lifted results. Management also highlighted five acquisitions completed so far this year and continued investment in distribution capacity.

For the quarter ended Aug. 31, 2026, sales rose 12.6% to C$562 million, including 10% internal growth and a 2.6% contribution from acquisitions, CFO and COO Antoine Auclair said. At comparable exchange rates, sales growth would have been 11.3%.

Third-quarter EBITDA increased 14.8% to C$65.5 million, while the EBITDA margin rose to 11.7% from 11.4% a year earlier. The result included a C$3 million reimbursement of U.S. tariffs, recorded as a reduction in cost of goods sold. Excluding that reimbursement, the EBITDA margin would have been 11.1%.

Net earnings attributable to shareholders increased 22.4% to C$29.2 million, and diluted earnings per share rose 23.3% to C$0.53. Excluding the tariff reimbursement, EPS would have been C$0.49, a 14.1% increase from the prior-year period.

U.S. business approaches half of sales

Canadian sales totaled C$300 million, up 10.2%, with management reporting growth across all regions. Sales to manufacturers in Canada rose 11.4% to C$252 million, while sales to hardware retailers increased 4.6% to C$48 million.

In the United States, sales rose 12.9% to US$187 million. Manufacturer sales increased 9.3% to US$172 million, including 7% internal growth. Sales to hardware retailers and renovation superstores climbed 86.1% to US$14.7 million, primarily due to initial deliveries to a major U.S. customer.

On a Canadian-dollar basis, U.S. sales totaled C$262 million and accounted for 46.6% of quarterly revenue. President and CEO Richard Lord said sales to U.S. manufacturers now represent 49% of Richelieu’s total sales to manufacturers.

Auclair said the initial deliveries to the major U.S. retail customer totaled roughly US$7 million in the third quarter. He said recurring sales are expected to begin in the fourth quarter and amount to approximately US$10 million annually, or about US$2.5 million per quarter.

Acquisitions add sales and distribution coverage

Lord said Richelieu completed five acquisitions so far in 2026, which together add C$145 million in annual sales. During the third quarter, the company acquired Solutions Acoustiques, a Montreal-area provider of decorative and high-performance acoustic solutions, and Winnec, which operates three specialized-hardware distribution centers in the Greater Toronto Area.

On Sept. 1, Richelieu completed its acquisition of The Penrod Company’s hardware division. Lord said the transaction adds C$60 million in annual sales and seven U.S. distribution centers, while expanding the company’s presence with door manufacturers, architects, residential and commercial contractors, and specialty distributors.

Auclair said Penrod’s EBITDA margin is similar to Richelieu’s and that the company paid about seven times EBITDA, somewhat above the multiples it typically pays. He called the acquisition strategic.

During the first nine months, Richelieu invested C$45.8 million, including C$31.7 million for four business acquisitions and C$14.1 million largely for equipment intended to maintain and improve operational efficiency, including IT equipment. The company ended the period with C$702 million in working capital and a working-capital ratio of 3.2-to-1.

Pricing contribution expected to fade

Lord said pricing accounted for approximately 40% of the company’s third-quarter internal growth. He does not expect that same pricing benefit over the next three quarters, saying tariff-related adjustments have largely been implemented and that pricing should be stable in the near term unless suppliers raise prices.

Auclair said tariffs were passed through as a dollar amount without an additional margin, diluting margin percentages despite contributing to revenue growth. He said the effect should be largely behind the company beginning in the fourth quarter as higher-cost products are incorporated into average costs.

Management said it was seeing internal growth of roughly 3% to 4% after the quarter ended. Auclair expects fourth-quarter EBITDA margin to be around 11% and said Richelieu is working to maintain that level through 2027. He added that a more vigorous market and higher volumes would be needed to improve margins further.

Renovation activity supports demand

Lord pointed to continued renovation activity in residential and commercial markets. In the third quarter, sales to the kitchen-cabinet industry increased 5.3% in Canada and 4.8% in the U.S., while commercial-renovation sales grew 11% in Canada and 5.5% in the U.S.

Sales in other specialized markets, including closets, rose 10.5% in Canada and 21% in the U.S., according to Lord. Door and window sales increased 5% in Canada and 8% in the U.S. He also cited Canadian office-furniture sales growth of 10%, while that category was flat in the U.S.

Richelieu separately announced a C$15 million investment in its Drummondville facility. The project is already underway and is expected to expand warehouse space to 180,000 square feet from 40,000 square feet by spring 2027.

“The economic outlook remains uncertain, but we continue to move forward with confidence,” Lord said, citing investments in innovation, market expansion and acquisitions.

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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