True Value Q2 revenue up, profit down
Chicago-based True Value Co. has reported revenue of $529.5 million for the second quarter ended July 2, up 0.4% from $527.5 million in the same period a year ago. Net margin totaled $21.8 million, down 16.8% from $26.2 million in the second quarter of 2010.
For the six months of fiscal 2011, True Value reported revenue of $977.3 million, up 2.2% from $956.1 million in the year-ago period. Comp-store sales to core domestic hardware store outlets were down 0.1%. The 2011 year-to-date net margin was $29.8 million, down 13.1% from $34.3 million in the first six months of 2010. Total debt increased $34.8 million to $179.8 million from one year ago.
"I am pleased with our revenue increase for the year, particularly given the poor spring season in April and May, as well as softening consumer confidence," said president and CEO Lyle Heidemann.
True Value cited higher vendor-direct shipments to certain affiliate and international members for its overall revenue increase. However, the company pointed to three factors for its profit decline: True Value absorbed $2.2 million of outbound transportation cost increases, primarily fuel, for its members; inbound freight costs from suppliers were up $1.2 million; and a $1.3 million increase in employee medical expenses.
"In spite of the economy, our retailers are continuing to invest in their stores," Heidemann said. "They have implemented approximately 606,000 sq. ft. of the Destination True Value format so far this year, and with the projects currently scheduled for the last half of the year, we should achieve our goal of implementing 1.25 million sq. ft. for this year."
True Value, which counts approximately 4,600 independent retailers as members of its co-op. It posted annual sales of $1.8 billion in 2010.