Richelieu Hardware has delivered a strong financial performance in the first quarter of 2026, showcasing increased sales and profitability despite facing currency fluctuations and a challenging retail environment in Canada. The company's strategic focus on acquisitions and operational efficiency has played a crucial role in its continued growth trajectory, setting a positive tone for the fiscal year ahead.
During the recent earnings call for the period ending February 28, 2026, Richelieu Hardware's President and CEO, Richard Lord, emphasized the company's sustained growth momentum. Total sales saw a 5% increase, reaching CAD 463.6 million. This growth was primarily driven by a 2% internal expansion and a 3% contribution from recent acquisitions. Lord noted that without the appreciation of the Canadian dollar against the U.S. dollar, sales growth would have been an even more impressive 7%.
The company's success in integrating new businesses was highlighted, following a year of significant acquisition activities in 2025. In December, Richelieu completed its first acquisition of 2026, adding three McKillican American distribution centers in Oregon and Washington. Furthermore, the company has signed two letters of intent for potential acquisitions in Canada, indicating a clear strategy for continued market expansion.
Sales to manufacturers were particularly strong, climbing 6% to CAD 408.2 million, benefiting from solid performance in both Canadian and U.S. markets. However, the hardware retailers and renovation superstores channel experienced a 1.9% decline, totaling CAD 55.4 million, mainly due to a 6% decrease in Canadian sales within this segment. Conversely, U.S. sales in the same segment grew by 21% in U.S. dollars, showcasing regional variances in market conditions.
Geographically, Canadian sales grew by 3.4% to CAD 249.8 million, with manufacturer sales at CAD 206.3 million and hardware retail sales at CAD 43.5 million. U.S. sales, reported at $155.6 million (USD), saw an 11.3% increase, composed of 6.4% internal growth and 4.9% from acquisitions. In Canadian dollars, U.S. sales reached CAD 214 million, representing 46% of the company's total sales.
First-quarter EBITDA increased by 1.9% to CAD 43.2 million, though it was impacted by a CAD 1.6 million negative foreign exchange effect. Excluding this, EBITDA would have risen by 5.6%. The EBITDA margin stood at 9.3%, slightly below the previous year's 9.6%. Management explained that tariffs affected the EBITDA margin percentage, quantifying the impact at approximately 20 basis points, but reassured that tariff costs would be passed on to maintain EBITDA dollar value.
Net earnings attributable to shareholders saw a 3.6% increase to CAD 14.4 million, with diluted earnings per share rising to CAD 0.26. Cash flow from operating activities before changes in non-cash working capital was CAD 37.9 million, or CAD 0.69 per diluted share. Despite a CAD 21 million use of working capital due to inventory increases, the company's financial position was described as "healthy and solid" by CFO Antoine Auclair, with CAD 625.7 million in working capital and minimal debt.
Looking ahead, management remains optimistic about market conditions, with positive trends observed in March and early April. They anticipate EBITDA margins to improve in the coming quarters, targeting around 11% for 2026 and eventually 12% to 13% in the long term. The company also expects to generate approximately CAD 100 million in additional revenue from M&A activities and projects a significant partnership with Lowe's in the U.S. starting in the third and fourth quarters, potentially adding $10 million annually.
Richelieu Hardware, a Canadian enterprise specializing in the import, manufacturing, and distribution of specialty hardware and related items, continues to fortify its market presence. With operations spanning Canada and key regions of the United States, the company serves diverse clients including home furnishing manufacturers, woodworkers, and hardware retailers. Its comprehensive product range encompasses various hardware types and storage solutions, reinforcing its commitment to delivering long-term value and sustained growth.