Richelieu Hardware Q4 2025 Richelieu Hardware Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Richelieu Hardware Ltd Earnings Call
[Analyst] (Aiera): Good afternoon, ladies and gentlemen, and welcome to Richelieu Hardware Q4 results call. At this time, all lines are in the listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. Note that this call is being recorded on 15 January 2026.
Speaker #1: And welcome to Richelieu. Good afternoon, ladies and gentlemen. Hardware Q4 results. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session.
Speaker #1: If at any time during this call you require immediate assistance, please press * for the operator. Note that this call is being recorded on January 15, 2026.
Speaker #1: Bonjour, mesdames et messieurs, et bienvenue au résultat du quatrième trimestre 2025 de Q4 Richelieu. Présentement, vos lignes sont en mode écoute seulement. Suite à la présentation, nous allons procéder à une vérification et réponse, qui sera restreinte aux analystes seulement.
[Unknown Speaker]: Bonjour, mesdames et messieurs, et bienvenue aux résultats du quatrième trimestre 2025 de Quincaillerie Richelieu. Présentement, vos lignes sont en mode d'écoute seulement. Suite à la présentation, nous allons procéder à une période de questions et réponses qui sera restreinte aux appels seulement. Si vous avez besoin d'assistance au cours de l'appel, appuyez sur l'étoile et zéro. Veuillez prendre note que cet appel est enregistré le 15 janvier 2026. J'aimerais maintenant céder la parole à Monsieur Richard Lord, Président et Chef de la Direction.
Speaker #1: Si vous avez besoin d’assistance au cours de l’appel, appuyez sur étoile zéro. Veuillez prendre note que cet appel est enregistré le 15 janvier 2026.
Speaker #1: J'aimerais maintenant céder la parole à Monsieur Richard Lord, président et chef de la direction. La parole est à vous.
Operator: La parole est à vous. Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richelieu's conference call for the fourth quarter and the year ended 30 November 2025. With me is Antoine Auclair, CFO and COO. As usual, note that some of today's issues include forward-looking information, which is provided with the usual disclaimer, as reported in our financial filings. Overall, we delivered a strong fourth quarter with good progress in our main market segments. We also closed three new acquisitions during the year, building on the six acquisitions completed earlier in the fiscal, two in Canada, and four in the US. For the quarter, sales increased by 7.3% to CAD 511 million. EBITDA increased by 9.1%, diluted earnings per share increased by 4.5%, and cash flow from operations reached CAD 68.7 million, including a CAD 30 million reduction in inventory.
Speaker #2: Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richelieu's conference call for Q4 and the year ended November 30, 2025. With me is Antoine Auclair, CFO and COO.
[Analyst] (Aiera): Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richelieu's conference call for the fourth quarter and the year ended 30 November 2025. With me is Antoine Auclair, CFO and COO. As usual, note that some of today's issues include forward-looking information, which is provided with the usual disclaimer, as reported in our financial filings. Overall, we delivered a strong fourth quarter with good progress in our main market segments. We also closed three new acquisitions during the year, building on the six acquisitions completed earlier in the fiscal, two in Canada, and four in the US. For the quarter, sales increased by 7.3% to CAD 511 million. EBITDA increased by 9.1%, diluted earnings per share increased by 4.5%, and cash flow from operations reached CAD 68.7 million, including a CAD 30 million reduction in inventory.
Speaker #2: As usual, note that some of today's issues include forward-looking information, which is provided with the usual disclaimer. As reported in our financial filings, overall, we delivered a strong Q4 with good progress in our main market segments.
Speaker #2: We also closed three new acquisitions during the year, building on the six acquisitions completed earlier in the fiscal—two in Canada and four in the US.
Speaker #2: For the quarter, sales increased by 7.3% to $511 million. EBITDA increased by 9.1%, diluted earnings per share increased by 4.5%, and cash flow from operations reached $68.7 million, including a $30 million reduction in inventory.
Speaker #2: These results highlight the strength of our model and our operating discipline. The Q4 was active on the acquisition front. We closed Ideal Security in September, Finmax Number and Classen Bonds in October.
Operator: These results highlight the strength of our model and our operating discipline. The fourth quarter was active on the acquisition front. We closed Ideal Security in September, Finmac Lumber, and Klassen Bronze in October. Ideal Security, located in the Greater Montreal area, distributes specialized hardware products for the door and window market and serves hardware retailers and the renovation superstores market, as well as an online retail platform. Finmac Lumber is a specialized wood product distributor based in Winnipeg, serving Western Canada. Klassen Bronze, based in Ontario, strengthens our offering with a wide range of letter, number, sign, and mailboxes, key blanks, and key cutting machines for the hardware retailers and the renovation superstore market. We are very pleased with this acquisition, particularly with Ideal and Klassen, which expand our Richelieu portfolio of private brands for the retailers and renovation superstores market to 10.
These results highlight the strength of our model and our operating discipline. The fourth quarter was active on the acquisition front. We closed Ideal Security in September, Finmac Lumber, and Klassen Bronze in October. Ideal Security, located in the Greater Montreal area, distributes specialized hardware products for the door and window market and serves hardware retailers and the renovation superstores market, as well as an online retail platform. Finmac Lumber is a specialized wood product distributor based in Winnipeg, serving Western Canada. Klassen Bronze, based in Ontario, strengthens our offering with a wide range of letter, number, sign, and mailboxes, key blanks, and key cutting machines for the hardware retailers and the renovation superstore market. We are very pleased with this acquisition, particularly with Ideal and Klassen, which expand our Richelieu portfolio of private brands for the retailers and renovation superstores market to 10.
Speaker #2: Ideal Security, located in the Greater Montreal area, distributes specialized hardware products for the doors and windows market, and serves hardware retailers and renovation superstores, as well as the online retail platform.
Speaker #2: Finmax Number is a specialized wood product distributor based in Winnipeg, serving Western Canada. Classen Bonds, based in Ontario, strengthens our offering with a wide range of letter, number, sign, and mailboxes, key lengths, and key cutting machines for the hardware retailers and renovation superstore market.
Speaker #2: We are very pleased with these acquisitions, particularly with Ideal and Classen, which expand our Richelieu portfolio of private brands for the retailers and renovation superstores market to 10.
Speaker #2: These acquisitions reinforce our position in the key market segment and support our one-stop shop strategy, supported by our distribution centers in Calgary for Western Canada customers, Kitchener for Eastern Canada, and Chicago for the US market.
Operator: These acquisitions reinforce our position in the ski market segment and support our one-stop-shop strategy, supported by our distribution centers in Calgary for Western Canada customers, Kitchener for Eastern Canada, and Chicago for the US market. Private brands and exclusive products remain an important differentiator for Richelieu. A significant proportion of our sales is generated through these offerings, which support customer satisfaction and loyalty while reinforcing our competitive positioning and margin profile. The strong fourth quarter drove total sales for the year to CAD 1.96 million, up 7.2%. EBITDA for the year increased by 6.2%, and cash flow from operations reached CAD 202 million. We closed the year with a positive cash position, almost no debt, and a working capital of CAD 622 million, which means a solid and healthy financial position and an outstanding balance sheet.
These acquisitions reinforce our position in the ski market segment and support our one-stop-shop strategy, supported by our distribution centers in Calgary for Western Canada customers, Kitchener for Eastern Canada, and Chicago for the US market. Private brands and exclusive products remain an important differentiator for Richelieu. A significant proportion of our sales is generated through these offerings, which support customer satisfaction and loyalty while reinforcing our competitive positioning and margin profile. The strong fourth quarter drove total sales for the year to CAD 1.96 million, up 7.2%. EBITDA for the year increased by 6.2%, and cash flow from operations reached CAD 202 million. We closed the year with a positive cash position, almost no debt, and a working capital of CAD 622 million, which means a solid and healthy financial position and an outstanding balance sheet.
Speaker #2: Private brands and exclusive products remain an important differentiator for Richelieu. A significant proportion of our sales is generated through these offerings, which support customer satisfaction and loyalty while reinforcing our competitive positioning and margin profile.
Speaker #2: The strong Q4 drove total sales for the year to $1.96 million, up 7.2%. EBITDA for the year increased by 6.2%, and cash flow from operations reached $202 million.
Speaker #2: We closed the year with a positive cash position, almost no debt, and a working capital of $622 million, which means a solid and healthy financial position and an outstanding balance sheet.
Speaker #2: I will now ask Antoine to review the financial highlights for the quarter and the year ended November 30, 2025.
Operator: I will now ask Antoine Auclair to review the financial highlights for the quarter and the year ended 30 November 2025. Thanks, Richard Lord. Our fourth quarter sales reached CAD 511 million, up 7.3%. Sales to manufacturers stood at CAD 459.9 million, up 9.1%, with 5.9% from internal growth and 3.2% from acquisitions. In the hardware retailers and renovation superstores market, sales were down 6.4%. In Canada, sales amounted to CAD 282 million, up CAD 6.8 million, or 2.5%. Sales to manufacturers reached CAD 241 million, an increase of 4.6%. In the retailers market, total sales totaled CAD 41 million, down 10.7% this quarter, mainly due to timing differences. On a year-to-date basis, sales are in line with last year. In the US, sales totaled $164 million in US dollars, up 12.3%. Sales to manufacturers reached $157 million in US dollars, up 12.9%, including 8.8% internal growth, mainly driven by price increases.
I will now ask Antoine Auclair to review the financial highlights for the quarter and the year ended 30 November 2025.
[Analyst] (Aiera): Thanks, Richard Lord. Our fourth quarter sales reached CAD 511 million, up 7.3%. Sales to manufacturers stood at CAD 459.9 million, up 9.1%, with 5.9% from internal growth and 3.2% from acquisitions. In the hardware retailers and renovation superstores market, sales were down 6.4%. In Canada, sales amounted to CAD 282 million, up CAD 6.8 million, or 2.5%.
Speaker #3: Thanks, Richard. Our Q4 sales reached $511 million, up 7.3%. Sales to manufacturers stood at $459.9 million, up 9.1%, with 5.9% from internal growth and 3.2% from acquisitions.
Speaker #3: In the hardware retailers and renovation superstores market, sales were down 6.4%. In Canada, sales amounted to $282 million, up $6.8 million or 2.5%. Sales to manufacturers reached $241 million, an increase of 4.6%.
Sales to manufacturers reached CAD 241 million, an increase of 4.6%. In the retailers market, total sales totaled CAD 41 million, down 10.7% this quarter, mainly due to timing differences. On a year-to-date basis, sales are in line with last year. In the US, sales totaled $164 million in US dollars, up 12.3%. Sales to manufacturers reached $157 million in US dollars, up 12.9%, including 8.8% internal growth, mainly driven by price increases.
Speaker #3: In the retailers market, total sales totaled $41 million, down 10.7% this quarter, mainly due to timing differences. On a year-to-date basis, sales are in line with last year.
Speaker #3: In the US, sales totaled $164 million in US dollars up 12.3%. Sales to manufacturers reached $157 million in US dollars up 12.9%, including $8.8% internal growth, mainly driven by price increases.
Speaker #3: In the retailers market, sales were up 1.4%. Total sales in the US reached $229 million Canadian dollars and increased by 13.9%, representing 45% of total sales.
Operator: In the retailers market, sales were up 1.4%. Total sales in the US reached CAD 229 million in Canadian dollars, an increase of 13.9%, representing 45% of total sales. Total sales for 2025 reached CAD 1.96 billion, an increase of 7.2%, of which 3.2% from acquisitions, and 4% from internal growth. Sales to manufacturers reached CAD 1.7 billion, up 8%, of which 4.4% from internal growth, and 3.6% from acquisitions. Sales to hardware retailers grew by 1.6%. In Canada, sales totaled CAD 1.1 billion, up 2.2%, primarily driven by acquisitions. Sales to manufacturers amounted to CAD 897 million, up 2.8%. Sales to hardware retailers and renovation superstores were CAD 175 million, essentially flat compared with last year. In the US, sales amounted to $638 million in US dollars, up 10.9%, of which 5% from internal growth, and 5.9% from acquisitions. They reached CAD 893 million in Canadian dollars, up 13.9%, accounting for 45% of total sales.
In the retailers market, sales were up 1.4%. Total sales in the US reached CAD 229 million in Canadian dollars, an increase of 13.9%, representing 45% of total sales. Total sales for 2025 reached CAD 1.96 billion, an increase of 7.2%, of which 3.2% from acquisitions, and 4% from internal growth. Sales to manufacturers reached CAD 1.7 billion, up 8%, of which 4.4% from internal growth, and 3.6% from acquisitions. Sales to hardware retailers grew by 1.6%. In Canada, sales totaled CAD 1.1 billion, up 2.2%, primarily driven by acquisitions.
Speaker #3: Total sales for 2025 reached $1.96 billion and increased 7.2%, of which 3.2% was from acquisitions and 4.0% from internal growth. Sales to manufacturers reached $1.7 billion, up 8%, of which 4.4% was from internal growth and 3.6% from acquisitions.
Speaker #3: Sales to hardware retailers grew by 1.6%. In Canada, sales totaled $1.1 billion, up 2.2%, primarily driven by acquisitions. Sales to manufacturers amounted to $897 million, up 2.8%.
Sales to manufacturers amounted to CAD 897 million, up 2.8%. Sales to hardware retailers and renovation superstores were CAD 175 million, essentially flat compared with last year. In the US, sales amounted to $638 million in US dollars, up 10.9%, of which 5% from internal growth, and 5.9% from acquisitions. They reached CAD 893 million in Canadian dollars, up 13.9%, accounting for 45% of total sales.
Speaker #3: Sales to hardware retailers and renovation superstores were $175 million, essentially flat compared with last year. In the US, sales amounted to $638 million, up 10.9%, of which 5% was from internal growth and 5.9% from acquisitions.
Speaker #3: They reached $893 million in Canadian dollars, up 13.9%, accounting for 45% of total sales. Sales to manufacturers reached $604 million in US dollars and increased by 11.1%, and sales to hardware retailers were up by 7.8%.
Operator: Sales to manufacturers reached $604 million in US dollars, an increase of 11.1%, and sales to hardware retailers were up by 7.8%. Q4 EBITDA amounted to CAD 59.2 million, compared to CAD 54.3 million in Q4 2024, up 9.1%. Our gross margin remained stable, and the EBITDA margin stood at 11.6%, compared to 11.4% in the same period last year. Q4 net earnings attributable to shareholders totaled CAD 25.6 million, compared with CAD 24.4 million last year. Diluted net earnings per share were CAD 0.46, compared with CAD 0.44 last year, an increase of 4.5%. For the year, net earnings reached CAD 86 million, or CAD 1.55 per diluted share, compared with CAD 1.53 last year, an increase of 1.3%. Q4 adjusted cash flow from operating activities was CAD 48.3 million, or CAD 0.87 per share.
Sales to manufacturers reached $604 million in US dollars, an increase of 11.1%, and sales to hardware retailers were up by 7.8%. Q4 EBITDA amounted to CAD 59.2 million, compared to CAD 54.3 million in Q4 2024, up 9.1%. Our gross margin remained stable, and the EBITDA margin stood at 11.6%, compared to 11.4% in the same period last year. Q4 net earnings attributable to shareholders totaled CAD 25.6 million, compared with CAD 24.4 million last year. Diluted net earnings per share were CAD 0.46, compared with CAD 0.44 last year, an increase of 4.5%. For the year, net earnings reached CAD 86 million, or CAD 1.55 per diluted share, compared with CAD 1.53 last year, an increase of 1.3%. Q4 adjusted cash flow from operating activities was CAD 48.3 million, or CAD 0.87 per share.
Speaker #3: Q4 EBITDA amounted to $59.2 million compared to $54.3 million in the Q4 of 9.1%. 2024, up stable, and the EBITDA margin stood at 11.6% compared to 11.4% in the same period last year.
Speaker #3: Q4 net earnings attributable to shareholders totaled $25.6 million compared with $24.4 million last year. Diluted net earnings per share were $0.46 compared with $0.44 last year, an increase of 4.5%.
Speaker #3: For the year, net earnings reached $86 million, or $1.55 per diluted share, compared with $1.53 last year, an increase of 1.3%. Q4 adjusted cash flow from operating activities was $48.3 million, or $0.87 per share.
Speaker #3: Net change in non-cash working capital balances represented a cash inflow of $20.4 million, driven by a $30.1 million reduction in inventories. Consequently, we generated $68.7 million in cash flow from operating activities compared with $27.2 million in Q4 of 2024.
Operator: Net change in non-cash working capital balances represented a cash inflow of CAD 20.4 million, driven by a CAD 30.1 million reduction in inventories. Consequently, we generated CAD 68.7 million in cash flow from operating activities, compared with CAD 27.2 million in the fourth quarter of 2024. For the year, operating activities generated a cash inflow of CAD 202.4 million, compared with CAD 133.6 million last year. Over the year, we paid CAD 34 million in dividend, representing a payout ratio of 37.5%. We also repurchased common share for CAD 16 million, including CAD 13 million in the fourth quarter. In total, we returned CAD 50 million to shareholders this year. Investing activities used cash flow of CAD 62 million, including CAD 47.1 million for nine business acquisitions completed this fiscal year, and CAD 15.2 million primarily for the purchase of equipment aimed at maintaining and improving operational efficiency. I now turn it over to Richard. Thank you, Antoine.
Net change in non-cash working capital balances represented a cash inflow of CAD 20.4 million, driven by a CAD 30.1 million reduction in inventories. Consequently, we generated CAD 68.7 million in cash flow from operating activities, compared with CAD 27.2 million in the fourth quarter of 2024. For the year, operating activities generated a cash inflow of CAD 202.4 million, compared with CAD 133.6 million last year. Over the year, we paid CAD 34 million in dividend, representing a payout ratio of 37.5%.
Speaker #3: For the year, operating activities generated a cash inflow of $202.4 million, compared with $133.6 million last year. Over the year, we paid $34 million in dividends, representing a payout ratio of 37.5%.
Speaker #3: We also repurchased common shares for $16 million, including $13 million in Q4. In total, we returned $50 million to shareholders this year. Investing activities used cash flow of $62 million, including $47.1 million for nine business acquisitions completed this fiscal year, and $15.2 million primarily for the purchase of equipment aimed at maintaining and improving operational efficiency.
We also repurchased common share for CAD 16 million, including CAD 13 million in the fourth quarter. In total, we returned CAD 50 million to shareholders this year. Investing activities used cash flow of CAD 62 million, including CAD 47.1 million for nine business acquisitions completed this fiscal year, and CAD 15.2 million primarily for the purchase of equipment aimed at maintaining and improving operational efficiency. I now turn it over to Richard. Thank you, Antoine.
Speaker #3: I
Speaker #3: Now, I'll turn it over to Richard. Thank you.
Speaker #2: Thank you, Antoine. I am proud to note that, over the past 13 months, we completed 10 acquisitions in Canada and in the US, representing approximately $100 million in additional sales.
Operator: I am proud to note that over the past 13 months, we completed 10 acquisitions in Canada and in the US, representing approximately CAD 100 million in additional sales. In our most recent acquisition completed after the year-end, we bring the total to 100 acquisitions so far that Richelieu has made in its complete history. Specifically, this most recent acquisition includes three McKillican distribution centers located in Portland, Oregon, Seattle, and Spokane, Washington. These centers are already integrated into our IT system, and the Seattle operations have already been moved to our current Seattle distribution center. This transaction reinforces our distribution network, enhances local expertise, and expands our product and service offering to better serve our customers. As a result, we now operate five locations across the Pacific Northwest region.
[Analyst] (Aiera): I am proud to note that over the past 13 months, we completed 10 acquisitions in Canada and in the US, representing approximately CAD 100 million in additional sales. In our most recent acquisition completed after the year-end, we bring the total to 100 acquisitions so far that Richelieu has made in its complete history. Specifically, this most recent acquisition includes three McKillican distribution centers located in Portland, Oregon, Seattle, and Spokane, Washington.
Speaker #2: In our most recent acquisition, completed after the year-end, we are going to total 100 acquisitions so far that Richelieu has made in its complete history.
Speaker #2: Especially, this most recent acquisition encroached three major American distribution centers located in Portland, Oregon; Seattle; and Spokane, Washington. These centers are already integrated into our IT system.
These centers are already integrated into our IT system, and the Seattle operations have already been moved to our current Seattle distribution center. This transaction reinforces our distribution network, enhances local expertise, and expands our product and service offering to better serve our customers. As a result, we now operate five locations across the Pacific Northwest region.
Speaker #2: And the Seattle operations have already been moved to our current Seattle distribution center. This transaction reinforces our distribution network, leverages local expertise, and expands our product and service offering to better serve our customers.
Speaker #2: As a result, we now operate five locations across the Pacific Northwest region. In the current environment, our business model continues to demonstrate its resilience and flexibility, enabling us to respond with agility to our customer needs and protect our margins.
Operator: In the current environment, our business model continues to demonstrate its resilience and flexibility, enabling us to respond with agility to our customer needs and protect our margins. Looking ahead, our two primary growth drivers, innovation and acquisition, position us well for continued profitable growth and further consolidate our leadership in North America. We are committed to ongoing investment in innovation to strengthen our offering and value-added services, and we actively pursue acquisition opportunities. Thanks, everyone. We'll now be happy to answer your questions. Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift the handset first before pressing any keys.
In the current environment, our business model continues to demonstrate its resilience and flexibility, enabling us to respond with agility to our customer needs and protect our margins. Looking ahead, our two primary growth drivers, innovation and acquisition, position us well for continued profitable growth and further consolidate our leadership in North America. We are committed to ongoing investment in innovation to strengthen our offering and value-added services, and we actively pursue acquisition opportunities. Thanks, everyone. We'll now be happy to answer your questions.
Speaker #2: Looking ahead, our two primary growth drivers—innovation and acquisition—position us well for continued profitable growth and further consolidate our leadership in North America.
Speaker #2: We are committed to ongoing investment in innovation to strengthen our offering and value-added services, and we actively pursue acquisition opportunities. Thanks, everyone. We'll now be happy to answer your questions.
[Analyst] (Aiera): Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift the handset first before pressing any keys.
Speaker #3: Thank you, sir. Ladies and gentlemen, if you don't have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised.
Speaker #3: And she wished to decline from the polling process. Please press star followed by two. And if you're using a speakerphone, please lift the handset first before pressing any keys.
Speaker #3: We'll go ahead and press star one now if you have any questions. The first question will be from Javier Patel at CIBC Capital Markets.
Operator: We'll go ahead and press star one now if you have any questions. The first question will be from Hamir Patel at CIBC Capital Markets. Please go ahead. Hi, good afternoon. Richard, could you comment on the sort of organic growth rates you've seen in Q1 so far, and any notable differences between Canada and the US? Yeah, what we're seeing in Q1 so far is a flat sales for the hardware to sales of hardware to retailers market. And in the mid, I would say something around 5% regarding the growth for the manufacturers market. So basically, we're satisfied with the start of the year. We don't know what's going to happen in the months to come, but so far, so good. And then when you think about how the US versus Canadian business is going, any differences there?
We'll go ahead and press star one now if you have any questions. The first question will be from Hamir Patel at CIBC Capital Markets. Please go ahead.
Speaker #3: Please go ahead.
Speaker #4: Hi, good afternoon. Richard, could you comment on the sort of organic growth rates you've seen in Q1 so far? And any notable differences between Canada and the—
Hamir Patel: Hi, good afternoon. Richard, could you comment on the organic growth rates you've seen in Q1 so far, and any notable differences between Canada and the US?
Speaker #4: US? Yeah, what we're seeing
[Analyst] (Aiera): Yeah, what we're seeing in Q1 so far is a flat sales for the hardware to sales of hardware to retailers market. In the mid, I would say something around 5% regarding the growth for the manufacturers market. Basically, we're satisfied with the start of the year. We don't know what's going to happen in the months to come, but so far, so good.
Speaker #2: in Q1 so far is a flat sales for the hardware to sales of hardware to retailers market. And we are in the mid I would say something around 5% regarding the growth for the manufacturers market.
Speaker #2: So basically, we’re satisfied with the start of the year. We don’t know what’s going to happen in the months to come. But so far, so good.
Hamir Patel: Then when you think about how the US versus Canadian business is going, any differences there? I know last quarter you were pointing to Ontario being softer.
Speaker #4: And then, when you think about how the U.S. versus Canadian business is going, any differences there? I know last quarter you were pointing to
Operator: I know last quarter you were pointing to Ontario being softer. We're seeing a little bit more growth in the US, a couple of percent growth additional. Okay, great. Antoine, I wanted to ask about the EBITDA margins. Looks like they ticked up to 11.6% in Q4. How should we think about the margin trajectory for Q1 and full year 2026? Yeah, the last two quarters were positive versus the previous year. So that trend should continue, but keep in mind that usually the first quarter of the year is the lowest of the fiscal year due to seasonality. But we should continue to see improvement in the EBITDA margin. Of course, it all depends on the type of acquisition that we'll be able to land, but same store sales, we should be able to generate more EBITDA.
Speaker #4: Ontario being softer.
Speaker #2: We see
[Analyst] (Aiera): We're seeing a little bit more growth in the US, a couple of percent growth additional.
Speaker #2: It's a bit more growth in the US, a couple of percent growth additional.
Hamir Patel: Okay, great. Antoine, I wanted to ask about the EBITDA margins. Looks like they ticked up to 11.6% in Q4. How should we think about the margin trajectory for Q1 and full year 2026?
Speaker #4: Okay, great. Antoine, I wanted to ask about the EBITDA margins. Looks like they ticked up to 11.6% in Q4. How should we think about the margin trajectory for Q1 and full year '26?
Speaker #2: Yeah, the last two quarters were positive versus the previous year. So that trend should continue. But keep in mind that usually the first quarter of the year, Q1, is the lowest of the fiscal year due to seasonality.
[Analyst] (Aiera): Yeah, the last two quarters were positive versus the previous year. So that trend should continue, but keep in mind that usually the first quarter of the year is the lowest of the fiscal year due to seasonality. We should continue to see improvement in the EBITDA margin. It all depends on the type of acquisition that we'll be able to land, but same store sales, we should be able to generate more EBITDA.
Speaker #2: But we should continue to see improvement in the EBITDA margin. Of course, it all depends on the type of acquisition that we will be able to land.
Speaker #2: But with same-store sales, we should be able to generate more EBITDA. And having a bit more rigor in the market will definitely help as well.
Operator: Having a bit more rigor in the market will definitely help as well. Then thinking on a full year basis, I mean, for the last two years, it looks like you've kind of averaged close to 11%. I know you've been quite acquisitive, so that's kind of a short-term drag, but do you think you can drive further margin growth in 2026? Yeah, we should be slightly north of 11%. Okay, great. That's all I had for now. I'll turn it over. Thanks. Thanks. Next question will be from Zachary Evershed at National Bank. Please go ahead. Good afternoon, everyone. Congrats on the quarter. Thank you. Could you go into a little bit more detail on the pullback that we saw in sales to retailers during the quarter, please?
Having a bit more rigor in the market will definitely help as well.
Speaker #2: Well. And then thinking on a full year,
Hamir Patel: Then thinking on a full year basis, I mean, for the last two years, it looks like you've averaged close to 11%. I know you've been quite acquisitive, so that's a short-term drag, but do you think you can drive further margin growth in 2026? Yeah, we should be slightly north of 11%. Okay, great. That's all I had for now. I'll turn it over. Thanks.
Speaker #4: Basis—I mean, for the last two years, looks like you’ve kind of averaged close to 11%. I know you’ve been quite acquisitive, so that’s kind of a short-term drag.
Speaker #4: But do you think you can drive further margin growth in—
Speaker #4: '26? Yeah, we should be
Speaker #2: slightly north of
Speaker #2: 11%.
Speaker #4: Okay,
Speaker #4: Great, that's all I had for now. I'll turn it over. Thanks.
Hamir Patel: Thanks.
Speaker #2: Thanks. Next question will be from
[Analyst] (Aiera): Next question will be from Zachary Evershed at National Bank. Please go ahead.
Speaker #3: Zachary Evershed at National Bank. Please go ahead.
Speaker #3: ahead. Good afternoon, everyone.
Zachary Evershed: Good afternoon, everyone. Congrats on the quarter.
Speaker #5: Congrats on the quarter.
[Analyst] (Aiera): Thank you.
Speaker #2: Thank you.
Zachary Evershed: Could you go into a little bit more detail on the pullback that we saw in sales to retailers during the quarter, please?
Speaker #5: Could you go into a little bit more detail on the pullback that we saw in sales to retailers during the—
Speaker #5: quarter, please? I
Speaker #2: I think the flat sales for the retailer, I think it's what we see if you read the Home Depot and Lowe's in the US. Whatever they're forecasting, they're forecasting flat sales.
Operator: I think the flat sales for the retailer. I think it's what we see with a few Lowe's, Home Depot, and Lowe's in the US, whatever they're forecasting. They're forecasting flat sales. In Canada, we see that the market is more negative. We speak to our customers, and their sales are down for the first quarter. Richelieu is doing well because we keep reintroducing products into the stores. We have new products coming with Rona that are getting into their stores. So that's going to generate sales in the months to come. We have the same thing with Home Hardware and Home Depot in Canada. In the US, fortunately, we have regained the business that we had lost with Lowe's. So basically, that's going to be the delivery will start only in the end of the second quarter and third quarter.
[Analyst] (Aiera): I think the flat sales for the retailer. I think it's what we see with a few Lowe's, Home Depot, and Lowe's in the US, whatever they're forecasting. They're forecasting flat sales. In Canada, we see that the market is more negative. We speak to our customers, and their sales are down for the first quarter. Richelieu is doing well because we keep reintroducing products into the stores. We have new products coming with Rona that are getting into their stores.
Speaker #2: And in Canada, we see that the market is more negative. We speak to our customers, and their sales are down for the first quarter.
Speaker #2: So Richelieu is doing well because we keep reintroducing—we're introducing—products into the stores. We have new products coming with RONA that are getting into their stores.
Speaker #2: So that's going to generate sales in the months to come. We have the same thing with Home Hardware and Home Depot in Canada. And in the US, fortunately, we have regained the business that we had lost with Lowe's.
That's going to generate sales in the months to come. We have the same thing with Home Hardware and Home Depot in Canada. In the US, fortunately, we have regained the business that we had lost with Lowe's. Basically, that's going to be the delivery will start only in the end of the second quarter and third quarter.
Speaker #2: So basically, that's going to be— the delivery will stop early at the end of the second quarter and third quarter. But basically, that will bring another $10 to $12 million sales in the US.
Operator: But basically, that will bring another $10 to 12 million in sales in the US. So I think we have only good news for the retailers. It's only a matter of the market being, as we speak, flat, but eventually, I think the market is going to start to move again. And Zach, the main reason for the Canadian retail sales down in Q4, and that's why we said that overall the year is flat, but in Q4, is because of one customer that didn't place orders for seasonal sales. So it's not a big deal. So it's only timing issues. So we remain positive for the retailer market. Gotcha. And do you think there's a catch-up in Q1 for those seasonal sales, or that's just foregone? No, I would say on a yearly basis, there's a catch-up, but just a question of timing. Understood. Thanks.
Basically, that will bring another $10 to 12 million in sales in the US. I think we have only good news for the retailers. It's only a matter of the market being, as we speak, flat, but eventually, I think the market is going to start to move again.
Speaker #2: So, I think we have only good news for the retailers. It's only a matter of the market being, as we speak, flat. But eventually, I think the market is going to start to move.
Speaker #2: again. And Zach, the
David Brown: Zach, the main reason for the Canadian retail sales down in Q4, and that's why we said that overall the year is flat, but in Q4, is because of one customer that didn't place orders for seasonal sales. It's not a big deal. So it's only timing issues.
Speaker #6: main reason for the Canadian retail sales down in the fourth quarter, and that's why we said that overall, the year is flat. But in the fourth quarter, it's because of one customer that didn't place orders for seasonal sales.
Speaker #6: So, it's not a big deal. So, it's only a timing issue.
Speaker #2: So, we remain positive for the retailer market.
Zachary Evershed: So we remain positive for the retailer market.
Zachary Evershed: Gotcha. Do you think there's a catch-up in Q1 for those seasonal sales, or that's just foregone?
Speaker #5: Gotcha. And do you think there's a catch-up in Q1 for those seasonal sales, or that's just—
Speaker #5: foregone? No, I would say
[Analyst] (Aiera): No, I would say on a yearly basis, there's a catch-up, but just a question of timing.
Speaker #2: On a yearly basis, there's a catch-up, but it's just a question of timing.
Zachary Evershed: Understood. Thanks. Your inventory reduction this quarter was pretty far ahead of the schedule you'd outlined last quarter.
Speaker #5: Understood. Thanks. And your inventory reduction this quarter was pretty far ahead of the schedule you'd outlined last quarter. What's driving the improvement in working capital there?
Operator: Your inventory reduction this quarter was pretty far ahead of the schedule you'd outlined last quarter. What's driving the improvement in working capital there? It's pretty much aligned with what we said at the beginning of the year, Zach. So of course, it's difficult to be perfectly timed during the quarters, but that's what we were expecting. I think I mentioned a year ago that we would be expecting between 20 and 30 million reduction in inventories. That's what we achieved. We achieved 33 million this year. That was positive. Hopefully, we will be able to generate a bit more reduction in 2026, not as big as that, but we'll continue to be actively working, improving, and optimizing our inventory situation. And also, I'm glad to see the CapEx that is now come down to a more maintenance level phase of CapEx.
[Analyst] (Aiera): What's driving the improvement in working capital there? It's pretty much aligned with what we said at the beginning of the year, Zach. It's difficult to be perfectly timed during the quarters, but that's what we were expecting. I think I mentioned a year ago that we would be expecting between 20 and 30 million reduction in inventories. That's what we achieved. We achieved 33 million this year. That was positive. Hopefully, we will be able to generate a bit more reduction in 2026, not as big as that, but we'll continue to be actively working, improving, and optimizing our inventory situation. I'm glad to see the CapEx that is now come down to a more maintenance level phase of CapEx.
Speaker #2: Well, it's pretty much aligned with what we said at the beginning of the year, Zach. So, of course, it's difficult to be perfectly timed during the quarters.
Speaker #2: But that's what we were expecting. I think I mentioned a year ago that we would be expecting between $20 million and $30 million reduction in inventories.
Speaker #2: That's what we achieved. We achieved $33 million this year, so that was positive. Hopefully, we will still be able to generate a bit more reduction in 2026—not as big as that—but we'll continue to be actively working on improving and optimizing our inventory situation.
Speaker #2: And also, I'm glad to see the CapEx that is now down come down to a more maintenance-level phase of CapEx. So we've had a few big years in terms of CapEx investment.
Operator: So we've had a few big years in terms of CapEx investment. So now we spent CAD 15 million. It's 0.08% of our sales. So that's more in line with historical data prior to COVID. So we're glad that it's back to normal. And as a result, I think in 2026, the cash flow generation is going to be strong. Excellent, Collier. Thank you. What are your customers saying about the pause on the additional tariffs on furniture and cabinets? They're very happy, but they only have to live with the first 25% that is already in place. So basically, I think our Canadian customers that are selling in the US are losing sales as we speak. They're reducing the number of employees and everything else.
We've had a few big years in terms of CapEx investment. So now we spent CAD 15 million. It's 0.08% of our sales. That's more in line with historical data prior to COVID. So we're glad that it's back to normal.
Speaker #2: So now we spent $15 million. It's 0.08% of our sales, so that's more in line with historical data prior to COVID. So we're glad that it's back to normal.
David Brown: As a result, I think in 2026, the cash flow generation is going to be strong.
Speaker #6: And as a result, I think in 2026 the cash flow generation is going to be strong.
Zachary Evershed: Excellent, Collier. Thank you. What are your customers saying about the pause on the additional tariffs on furniture and cabinets?
Speaker #5: Excellent, Collier. Thank you. What are your customers saying about the pause on the additional tariffs on furniture and—
Speaker #5: cabinets? They're very happy.
David Brown: They're very happy, but they only have to live with the first 25% that is already in place. Basically, I think our Canadian customers that are selling in the US are losing sales as we speak. They're reducing the number of employees and everything else.
Speaker #2: But they only have to live with the first 25% that is already in pause. So, basically, I think our Canadian customers that are selling in the US are losing sales as we speak.
Speaker #2: They're reducing the number of employees and everything else. They still continue to buy from Richelieu. But some buy less, but some buy more because they used to buy certain products from overseas.
Operator: They still continue to buy from Richelieu, but some buy less, but some buy more because they used to buy from overseas certain products now that they buy from Richelieu. So basically, we should see an equilibrium of the sales to that type of customers. The second phase, I think saved, I would say, I don't know how to say it, but you really saved their 2026 year, even though they're already negatively affected by the first 25%. If that second 25% applies next year, I think it could be very, very basically disastrous for the customers that export to the US. We don't have that many customers that export in the US, but it's still substantial business.
They still continue to buy from Richelieu, but some buy less, but some buy more because they used to buy from overseas certain products now that they buy from Richelieu. So basically, we should see an equilibrium of the sales to that type of customers. The second phase, I think saved, I would say, I don't know how to say it, but you really saved their 2026 year, even though they're already negatively affected by the first 25%. If that second 25% applies next year, I think it could be very, very basically disastrous for the customers that export to the US. We don't have that many customers that export in the US, but it's still substantial business.
Speaker #2: Now that they buy from Richelieu, so basically, we should see an equilibrium of the sales to that type of customers. And the second phase, I think, saved—I would say, I don't know how to say it, but you really saved their 2026 year.
Speaker #2: Even though they're already negatively affected by the first 25%. But if that second 25% applied next year, I think it could be very, very—it's basically a disaster for the customers that export to the US.
Speaker #2: But we don't have that many customers that export to the US, but it's still substantial business. But as a result of that, though, Richelieu recaptures some business on the US side because the customers that are capturing this market are also Richelieu customers in the US.
Operator: But as a result of that, though, Richelieu recaptures some business on the US side because the customers that are capturing this market are also Richelieu customers in the US. Gotcha. Thanks. And then how are you feeling about the M&A pipeline for 2026? You just came off of a year of almost CAD 100 million in 2025, starting off with an acquisition subsequent to the quarter. Where do you think you'll end this year? We'll continue with what we've told you guys a year and a half ago. So we're still on CAD 100 million a year. So that's what we're working on. The pipeline is healthy, both sides of the borders. So no change there. Gotcha. Thanks. I'll turn it over. Thank you. Thank you. And at this time, Mr. Lau, we have no other questions registered. Please proceed. Thanks to everyone for listening.
As a result of that, though, Richelieu recaptures some business on the US side because the customers that are capturing this market are also Richelieu customers in the US.
Speaker #5: Gotcha, thanks. And then, how are you feeling about the M&A pipeline for 2026? You just came off of a year of almost $100 million in 2025, starting off with an acquisition subsequent to the quarter.
Zachary Evershed: Gotcha. Thanks. And then how are you feeling about the M&A pipeline for 2026? You just came off of a year of almost CAD 100 million in 2025, starting off with an acquisition subsequent to the quarter. Where do you think you'll end this year?
Speaker #5: Where do you think you'll end this year?
David Brown: We'll continue with what we've told you guys a year and a half ago. We're still on CAD 100 million a year. That's what we're working on. The pipeline is healthy, both sides of the borders. No change there.
Speaker #2: We'll continue with what we've told you guys a year and a half ago. So, we're still on $100 million a year. So that's what we're working on.
Speaker #2: The pipeline is healthy, both sides of the borders, so no change.
Speaker #2: there. Gotcha.
Zachary Evershed: Gotcha. Thanks. I'll turn it over.
Speaker #5: Thanks. I'll turn it over.
Speaker #2: Thank you.
David Brown: Thank you.
[Analyst] (Aiera): Thank you. At this time, Mr. Lau, we have no other questions registered.
Speaker #7: Thank you. And at this time, Richelieu, we have no other questions registered. Please.
[Analyst] (Aiera): Please proceed. Thanks to everyone for listening. If you have any more questions, do not hesitate to call myself or Antoine. We're here in the office. Thank you very much and have a good afternoon.
Speaker #7: proceed.
Speaker #2: Listening. And so, if you have any more questions, do not hesitate to call myself or Antoine. We're here in the office. So, thank you very much.
Operator: If you have any more questions, do not hesitate to call myself or Antoine. We're here in the office. Thank you very much and have a good afternoon. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines.
Speaker #2: And have a good
Speaker #2: afternoon. Thank you, sir.
[Analyst] (Aiera): Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines.
Speaker #7: Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines.
