TRUE VALUE COMPANY ANNOUNCES CONTINUED STRATEGIC PROGRESS AND STRONG MARGIN EXPANSION IN SECOND QUARTER RESULTS
August 09, 2017
Achieves Year-to-Date Net Margin Increase of 43.5 Percent
Second Quarter Results Included:
• Net margin up 28.1 percent
• DTV retail comparable store sales up 1.8 percent
• Total retail comparable store sales up 0.9 percent
• Truevalue.com sales up 19 percent
CHICAGO, August 9, 2017 – True Value Company, one of the world’s largest retailer-owned hardware cooperatives, today reported second quarter results that demonstrate the ongoing progress being achieved by the company’s multi-year strategic growth plan.
The company posted net margin of $16.7 million in the second quarter, up 28.1 percent from a year ago. This brings the overall net margin to $10.9 million for the first six months of the year—a 43.5 percent increase over last year. The increase in net margin was primarily driven by good gross margin rates and tight monitoring of overhead expenses.
Despite a tough spring in many parts of the U.S., total retail comparable store sales were up 0.9 percent for the quarter ending July 1, 2017, with increases in seven of twelve regions of the country and in six of the company’s nine product categories. Targeted initiatives and investments led to a 22 percent increase in visits to TrueValue.com and a 19 percent increase in online sales.
Destination True Value (DTV) comparable store sales were up 1.8 percent in the quarter and 1.1 percent year-to-date, reinforcing the increased returns seen by retailers who have implemented DTV. During the first six months of 2017, True Value stores that remodeled the previous year experienced on average 5.9 percent growth at retail.
Gross billings of $579.7 million for the quarter were down 0.9 percent or $5.4 million from the same period a year ago. Revenue was $430.4 million, a decrease of 1.9 percent or $8.3 million. Wholesale sales, on a gross billings basis, were up 0.1 percent for the same period.
“We are now in the third year of our multi-year strategic plan and I’m very encouraged by the strong advancements we are making,” said President and CEO John Hartmann. “After a record-breaking year for ground-up and remodeled stores in 2016, we have continued to make good progress in building a stronger business. Our retailers are benefiting from strategic initiatives in areas such as omni-channel, retail excellence and product assortments that improve the customer experience and generate sales growth. And we are doing all of this at the same time as delivering strong net margin expansion. Looking forward, we will continue to look for ways to accelerate our strategic growth plan to ensure that True Value is helping our stores to remain relevant in their communities and supporting their long-term growth, profitability and independence.”
Another key achievement for the company was the implementation of its paint 2-4-1 masterbrand strategy and the alliance with Benjamin Moore & Co. to sell Coronado paint in True Value hardware stores globally. To date, over 1,700 retailers are participating in the new pint sample program, along with hundreds of stores now stocking the new EasyCare 365 product and Master Painter applicator. International paint sales were up over 42 percent year to date, with new stores primarily driving the growth.
Additionally, over 17,000 Customized True Blue (CTB) assortments were sold to True Value stores in the first half of 2017—a 56 percent increase over 2016. “Participating in the CTB program has allowed us to update our assortments, stay relevant and have the latest and greatest in every category,” said Ben Brinkmann of Brinkmann’s True Value. “We’ve seen great results and I can’t imagine anybody not taking advantage of the program.”