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Richelieu Hardware (TSE:RCH)
TSX:RCH
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Richelieu Hardware
(TSX:RCH)
67Neutral
Richelieu Hardware (RCH) vs. S&P 500 (SPY)
Market Cap
C$1.79B
Dividend Yield1.85%
Average Volume (3M)82.01K
Price to Earnings (P/E)21.3
Beta (1Y)0.77
Revenue Growth4.21%
EPS Growth-18.67%
CountryCA
Employees3,000
SectorConsumer Cyclical
Sector Strength58
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)1.52
Shares Outstanding55,301,003
10 Day Avg. Volume97,480
30 Day Avg. Volume82,007
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.02
Price to Cash Flow (P/CF)5.60
P/FCF Ratio7.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$38.00Price Target Upside17.03% Upside
Rating ConsensusHold
Number of Analyst Covering1
Richelieu Hardware Business Overview & Revenue Model
Company DescriptionRichelieu Hardware Ltd. manufactures, imports, and distributes specialty hardware and complementary products in North America. The company's principal product categories include furniture, glass and building decorative and functional hardware, lighting systems, finishing and decorating products, ergonomic workstation components, kitchen and closet storage solutions, sliding door systems, decorative and functional panels, high-pressure laminates, railing and balusters, and floor protection products, as well as accessories for power tools. It also manufactures veneer sheets and edge banding products; and various decorative moldings and components for the window and door industry. The company serves kitchen and bathroom cabinet, storage and closet, home furnishing, and office furniture manufacturers; door and window manufacturers; residential and commercial woodworkers; and hardware retailers, such as renovation superstores. The company was incorporated in 1968 and is headquartered in Montreal, Canada.
How the Company Makes MoneyRichelieu Hardware generates revenue primarily through the sale of its wide range of hardware and complementary products to various industries. The company operates through a distribution network that serves manufacturers, retailers, and hardware specialists. Key revenue streams include direct sales to businesses such as cabinet makers and furniture manufacturers, as well as sales through retail channels. Richelieu also benefits from strategic partnerships with international suppliers and manufacturers, enabling it to offer a diverse product portfolio. The company expands its market reach through acquisitions and investments in new product lines, further contributing to its revenue growth.
Richelieu Hardware Financial Statement Overview
Summary
Richelieu Hardware demonstrates stable revenue growth and a strong balance sheet with low leverage, which is a positive sign of financial health. However, declining profitability margins and reduced cash flow generation in recent periods suggest areas of concern that need addressing to maintain long-term financial stability. The company's solid equity position provides a buffer, but improving operational efficiency and cash flow generation will be crucial for future success.Income Statement
Richelieu Hardware has shown stable revenue growth over the years, with a notable increase from $1.04 billion in 2019 to $1.83 billion in 2024. However, the gross profit margin has seen some volatility, decreasing from 28.96% in 2022 to 24.57% in 2024. The net profit margin has also declined from 9.34% in 2022 to 4.68% in 2024, indicating pressure on profitability. Despite this, the company maintains a reasonable EBITDA margin of 10.99% in 2024.75
Positive
Balance Sheet
The company exhibits a strong equity base with a debt-to-equity ratio of 0.29 in 2024, reflecting conservative leverage. The equity ratio is healthy at 66.48%, indicating a robust capital structure. Return on equity has decreased from 20.61% in 2022 to 9.25% in 2024, suggesting a decline in profitability relative to shareholder equity.80
Positive
Cash Flow
Richelieu Hardware's operating cash flow has shown a significant decline from $270.66 million in 2023 to $133.56 million in 2024. Free cash flow remains positive at $103.00 million in 2024, but it has decreased from $228.56 million in 2023, indicating potential challenges in generating cash. The operating cash flow to net income ratio stands at 1.56 in 2024, showing adequate cash generation relative to net income.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.83B | 1.79B | 1.80B | 1.44B | 1.13B |
| Gross Profit | ||||
| 450.32M | 230.40M | 507.25M | 409.55M | 302.29M |
| EBIT | ||||
| 0.00 | 169.48M | 238.80M | 197.44M | 120.44M |
| EBITDA | ||||
| 201.42M | 230.40M | 287.44M | 234.40M | 154.46M |
| Net Income Common Stockholders | ||||
| 85.75M | 111.47M | 168.39M | 141.76M | 85.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 41.39M | 46.33M | 21.22M | 58.71M | 73.93M |
| Total Assets | ||||
| 1.39B | 1.31B | 1.28B | 964.18M | 771.06M |
| Total Debt | ||||
| 264.60M | 209.29M | 264.13M | 99.49M | 83.73M |
| Net Debt | ||||
| 223.21M | 162.96M | 242.91M | 40.79M | 9.80M |
| Total Liabilities | ||||
| 465.13M | 406.81M | 464.04M | 295.24M | 216.60M |
| Stockholders Equity | ||||
| 926.51M | 904.89M | 817.16M | 666.44M | 551.09M |
| Cash Flow | Free Cash Flow | |||
| 103.00M | 228.56M | -58.75M | 87.35M | 133.27M |
| Operating Cash Flow | ||||
| 133.56M | 270.66M | -36.17M | 104.41M | 145.71M |
| Investing Cash Flow | ||||
| -50.84M | -61.79M | -66.83M | -66.49M | -45.52M |
| Financing Cash Flow | ||||
| -117.87M | -72.36M | -66.64M | -53.69M | -50.84M |
Richelieu Hardware Technical Analysis
Negative
32.47
Price Trends
34.80
Negative
37.12
Negative
37.99
Negative
Market Momentum
-0.66
Positive
40.55
Neutral
12.28
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCH, the sentiment is Negative. The current price of 32.47 is below the 20-day moving average (MA) of 33.45, below the 50-day MA of 34.80, and below the 200-day MA of 37.99, indicating a bearish trend. The MACD of -0.66 indicates Positive momentum. The RSI at 40.55 is Neutral, neither overbought nor oversold. The STOCH value of 12.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:RCH.
Richelieu Hardware Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$32.01B | 45.39 | 9.33% | 0.61% | 11.98% | 22.53% | |
75 Outperform | C$7.19B | 9.22 | 18.00% | 5.40% | -26.31% | -14.85% | |
67 Neutral | C$1.79B | 21.31 | 9.08% | 1.85% | 4.21% | -18.67% | |
64 Neutral | C$501.63M | 19.20 | 8.37% | 1.61% | 2.41% | -16.76% | |
60 Neutral | $6.55B | 11.40 | 3.24% | 4.25% | 2.38% | -21.28% | |
58 Neutral | C$205.92M | 38.57 | 1.98% | 5.48% | 5.42% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:RCH
Richelieu Hardware
32.47
-5.86
-15.29%
TSE:ADW.A
Andrew Peller A NV
4.51
0.74
19.63%
TSE:BDI
Black Diamond
8.12
-0.44
-5.14%
TSE:CPX
Capital Power
48.59
15.00
44.66%
TSE:WSP
WSP Global
249.62
37.32
17.58%
CADNF
Cascades
6.46
0.06
0.94%
Richelieu Hardware Earnings Call Summary
Earnings Call Date: Apr 10, 2025 | % Change Since: -10.20% | Next Earnings Date: Jul 3, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture with solid sales growth and successful acquisitions but also challenges in retail sales, a decline in net earnings, and external risks like tariffs. The company's strategic investments and market expansions are positive, but financial pressures and market uncertainties temper the overall outlook.Highlights
Sales Growth
Total sales increased by 8.6% during the first quarter of 2025, driven by both internal growth and acquisitions. The manufacturers market saw a 10% increase in sales.
Successful Acquisitions
Five acquisitions were completed, contributing $50 million in sales and expanding Richelieu's presence in key markets such as Halifax, Denver, Minneapolis, New York, and New Jersey.
Strong Canadian Market Performance
Sales in Canada increased by 4.1%, with the manufacturers market seeing a 5% increase.
Investment in Infrastructure
Significant investments were made in facilities across North America, including new and expanded centers in Calgary, Vancouver, and other strategic locations.
Lowlights
Stable Retail Sales
Sales in the retailers and renovation superstores market remained stable compared to the previous year, indicating challenges in achieving growth in this segment.
Decrease in Net Earnings
Net earnings attributable to shareholders decreased by 8.6% from the first quarter of 2024, mainly due to increased amortization expenses.
Impact on EBITDA Margin
First quarter EBITDA margin decreased from 9.9% to 9.6% due to lower margins from recent acquisitions and increased marketing costs.
Tariff Concerns
Uncertainty around tariffs imposed by the US administration, particularly on Chinese products, could impact future operations and require mitigation strategies.
Company Guidance
During Richelieu Hardware’s First Quarter 2025 Results Conference Call, the company reported an 8.6% increase in total sales, reaching $442 million, driven equally by internal growth and acquisitions. The manufacturers market saw a 10% sales increase, with Canadian sales up 4.1% to $242 million, and U.S. sales climbing by 7.6% to $140 million USD. The five recent acquisitions contributed $50 million in sales, while first-quarter EBITDA rose by $2 million to $42.4 million, although the EBITDA margin slightly decreased to 9.6%. Net earnings attributable to shareholders fell by 8.6% to $13.9 million, with diluted net earnings per share at $0.25. The company also noted a cash inflow from operating activities of $3.7 million and highlighted a solid financial position with $613.2 million in working capital and minimal debt.Richelieu Hardware Corporate Events
Executive/Board ChangesShareholder Meetings
Richelieu Hardware Confirms Election of Directors at Annual Meeting
Positive
Apr 11, 2025
Richelieu Hardware Ltd. announced the successful election of all proposed directors during its Annual and Special Meeting of Shareholders held on April 10, 2025. The election results reaffirm the company’s stable governance structure, which is crucial for maintaining its leading position in the specialty hardware industry. The outcome of the vote reflects strong shareholder support, which is likely to positively impact the company’s strategic initiatives and stakeholder confidence.
Spark’s Take on TSE:RCH Stock
According to Spark, TipRanks’ AI Analyst, TSE:RCH is a Outperform.
Richelieu Hardware’s overall stock score reflects stable revenue growth and a solid balance sheet as key strengths. However, declining profit margins, cash flow challenges, and bearish technical indicators weigh down the score. The company’s strategic acquisitions and market expansion efforts are positive, but the stock’s valuation and recent earnings performance suggest caution. Improving operational efficiency and addressing market challenges will be crucial for future performance.
To see Spark’s full report on TSE:RCH stock, click here.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Richelieu Hardware Achieves Strong Q1 Growth with Strategic Acquisitions
Positive
Apr 10, 2025
Richelieu Hardware reported an 8.6% increase in sales for the first quarter of 2025, reaching $441.7 million, driven by both internal growth and strategic acquisitions. The company completed five acquisitions, enhancing its presence in key markets and diversifying its product offerings, while maintaining a solid financial position with a working capital of $613.2 million. Despite challenges such as US tariffs, Richelieu is well-positioned to navigate market changes, with less than 20% of its products imported from China.
Spark’s Take on TSE:RCH Stock
According to Spark, TipRanks’ AI Analyst, TSE:RCH is a Neutral.
Richelieu Hardware’s overall stock score reflects stable revenue growth and a solid balance sheet as key strengths. However, declining profit margins, cash flow challenges, and bearish technical indicators weigh down the score. The company’s strategic acquisitions and market expansion efforts are positive, but the stock’s valuation and recent earnings performance suggest caution. Improving operational efficiency and addressing market challenges will be crucial for future performance.
To see Spark’s full report on TSE:RCH stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.