Ace Hardware Hits $10B, But Profits Reveal a Deeper Strategic Shift

OAK BROOK, IL – February 18, 2026 – Ace Hardware Corporation announced today that it has crossed a major threshold, reporting a record $10.0 billion in full-year revenue for 2025. The achievement was bolstered by a strong fourth quarter and significant growth in its digital operations. However, a look beyond the top-line number reveals a more complex financial picture, as the company's net income saw a slight decline due to strategic restructuring and broader economic pressures.

Despite the dip in profitability, the hardware cooperative delivered a record $361.8 million patronage dividend to its member-retailers, underscoring the financial strength of its unique business model and its commitment to its locally-owned stores.

A Nuanced Financial Picture

Ace reported full-year revenues of $10.0 billion, a 5.8 percent increase from the previous year. The fourth quarter alone brought in $2.5 billion, up 9.9 percent from the same period in 2024. This growth was attributed to several factors, including an extra week in the 2025 fiscal calendar. Excluding the 53rd week, full-year revenue still grew by a healthy 4.6 percent.

However, the cooperative's net income for fiscal 2025 was $293.4 million, a decrease of $20.7 million from 2024. The company pointed to two primary factors for this decline. First, it absorbed $20.6 million in non-recurring asset impairment and shut-down charges related to its international operations, signaling a strategic shift in its global footprint. Second, higher interest expenses, which rose by $8.1 million due to increased borrowings, put pressure on the bottom line. The year-over-year comparison was also skewed by a one-time $17.8 million gain from a property sale in Arkansas that boosted 2024's figures.

Despite these charges, the company's leadership framed the year as a resounding success, focusing on the core drivers of growth.

"Comparable store growth of 0.7 percent from our hardware format stores, accelerated new store growth, and a 27 percent increase within our digital business fueled a very encouraging 5.8 percent increase in revenue for the year," said John Venhuizen, President and CEO. "With record revenue, record shareholder dividends, and a 40 percent pre-tax return on shareholder equity, the Ace team is to be commended for the discipline, productivity, and stewardship with which they managed our resources and opportunities."

The Dual Engines of Growth: Digital and Physical

Ace Hardware's 2025 performance highlights a successful execution of a modern, dual-pronged retail strategy. The company is proving that robust digital growth and aggressive physical store expansion are not mutually exclusive but can be powerful complementary forces.

On the digital front, the company reported a remarkable 27 percent increase in its online business. This surge is no accident; Ace has invested heavily in its e-commerce experience, earning recognition from the Baymard Institute for its top-tier user experience design. This digital prowess allows the cooperative to meet customers where they are, providing convenience that complements its neighborhood store presence.

Simultaneously, Ace is doubling down on its physical footprint. The company added 180 new domestic stores and, after accounting for 74 cancellations, achieved a net increase of 106 locations in 2025. This brings its total U.S. store count to 5,250. This expansion is part of a larger plan to invest $1 billion over the next five years in opening and remodeling stores. The initiative includes the rollout of a new store concept, 'Elevate3 Ace', which focuses on creating a more curated shopping experience around key categories like paint, power tools, and backyard living.

Thriving in a Shifting Market

Ace's performance is particularly notable when viewed against the backdrop of the broader home improvement market. While the pandemic-fueled DIY boom has cooled, Ace's focus on convenience and smaller projects appears well-suited for the current economic climate. With elevated mortgage rates discouraging homeowners from moving, many are instead investing in renovations and repairs for their existing homes—a trend that benefits the local hardware store.

U.S. retail same-store sales for the full year were nearly flat, increasing just 0.2 percent. This was the result of a 1.6 percent increase in the average ticket size being offset by a 1.3 percent decrease in the number of transactions. This pattern suggests that while customers may be visiting slightly less often, they are spending more when they do. In a market where larger competitors like Home Depot are bracing for potential revenue declines, Ace’s stability and modest growth are viewed as a sign of resilience.

The Cooperative Advantage

Central to Ace Hardware's resilience and continued growth is its cooperative business model. Unlike a traditional franchise, Ace is owned by its independent store members. This structure is the engine behind the record $361.8 million patronage dividend paid out in 2025. Instead of paying royalties, store owners receive a share of the profits based on their purchases through the co-op, money that is often reinvested directly into their businesses and local communities.

This model provides small business owners with the best of both worlds: the autonomy of local ownership and the immense power of a national brand. Retailers benefit from pooled resources for bulk purchasing, a sophisticated distribution network, and national marketing campaigns, all of which allow them to compete effectively against big-box giants. The success of this model is reflected in Ace's consistent high rankings on lists of top franchise and business opportunities.

As Ace Hardware moves forward, it continues to balance the management of short-term financial headwinds, such as its international restructuring, with a long-term growth strategy. By leveraging its unique cooperative strength and skillfully integrating its expanding digital and physical channels, the company has built a durable foundation for navigating the evolving retail landscape.