Page 36 - HW Sept 2021

global eyes
Metcash lauds “exceptional” year
THE FIRST DAY of September saw Metcash reveal its latest year end numbers, boasting “record sales, a significant increase in earnings and record operating cashflow”.
In terms of its hardware pillar, the following FY2021 numbers tell a fairly convincing tale with an almost 25% increase in top line and big gains at the bottom:
• Revenue AU$2.6 billion (+24.7% on FY2020)
• Underlying EBIT AU$136 million (+61.5%)
The hardware pillar’s Sapphire store
upgrade program continues to grow, from 200 to a target of 300 stores by 2025, new categories are being trialled
and rolled out (kitchen-laundry- bathroom, garden centre, connected home and decorate), more Trade Centre Sapphire stores are opening (aiming
for 50 by FY24) and its share of “whole of house” (foundations, frame & truss, lock-up, fix, fit-out) is planned to double.
Without revealing too much by way of details, Metcash is already calling its purchase of a 70% and then 85% stake in the 90-store Total Tools Holdings (TTH) operation
in September last year “a fantastic acquisition”.
It is however clearly also banking on strong growth with 8-10 new stores a year planned towards a target network size of
some 130 stores by 2025 and has already started buying TTH JV stores and is assessing potential to acquire more.
It will be interesting to see how its planned joint ranging and sourcing opportunities pan out.
Into the new year (FY2022), for the first 16 weeks ended 15 August 2021, Metcash’s hardware sales were +37.8% on FY2020, and +16.3% on FY2021.
Excluding TTH, sales were +22.7% on FY2020 and +3.6% on FY2021.
While DIY sales fell after the unusually high levels in FY2021, trade sales continued strong, but a flag was also raised about the possible impact of lockdowns and materials shortages.
www.metcash.com.au
End of the US DIY boom in sight?
THE US DIY boom seemed to be coming off the boil as The Home Depot, Lowe’s, and Ace Hardware released their FY2021 second quarter (Q2) numbers.
Indeed, pro sales seem to be supporting the gains at the big DIY operators with the US DIY boom seemingly moderating.
“As a result of their efforts, we achieved a milestone of over US$40 billion in quarterly sales for the first time in company history.
“I would like to extend my sincere appreciation to our team, as well as our supplier and supply chain partners, as
they continue to operate in this dynamic and challenging environment.”
www.homedepot.com
Lowe’s Total Home Strategy – The following day, Lowe’s also beat expectations, reporting Q2 sales of US$27.6 billion, up from US$27.3 billion, but with US comps negative 2.2%.
Lowe’s Q2 net earnings were US$3.0 billion compared to $2.8 billion in Q2 FY2020.
Comparing this year’s Q2 to a rather more normal quarter two years ago, Marvin Ellison, Lowe’s Chairman, President and CEO, comments: “Our strong results this quarter demonstrate that our Total Home strategy is working, with US sales comps up 32% on a two- year basis.”
Lowe’s also saw 21% growth in Pro,
10% growth in Installation Services, with sales on Lowes.com, +7% on top of 135% growth last year.
“Looking forward, I am confident in the positive outlook for our industry, and our ability to drive operating margin expansion and market share gains,” says Marvin Ellison, on top of which Lowe’s raised its outlook for the full year.
www.lowes.com
Records at Ace Hardware – The
same day, Ace Hardware’s Q2 FY 2021 numbers set more records for the co-op with revenues of US$2.5 billion (+8.2%), although net income at US$116 million was down 16.5% thanks to write-downs of excess PPE, higher warehouse labour costs, and a non-recurring US$6.9 million income tax benefit.
US comps were just +1.2%, with bigger baskets being offset by fewer transactions.
Still, says John Venhuizen, President & CEO: “Our second quarter vastly exceeded our expectations. Not only did we positively comp 2020’s unprecedented surge in business, our two-year stacked growth for the quarter is up 46% in revenue and 116% in net income from 2019.”
www.acehardware.com
The Home Depot’s challenge – Big Orange just about beat expectations as it reported sales of US$41.1 billion for Q2 FY2021, +8.1% on Q2 FY2020, and its biggest-ever quarterly revenue.
US comparable sales were +3.4% and net earnings were US$4.8 billion compared with net earnings of US$4.3 billion.
“I am very proud of our associates, who continue to demonstrate a relentless focus on serving our customers,” says Craig Menear, Chairman and CEO.
34 NZHJ | SEPTEMBER 2021
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