Q1 2026 Richelieu Hardware Ltd Earnings Call

I now turn it over to Richard. Thank you. In conclusion, we are integrating our recent acquisitions efficiently while continuing to actively pursue opportunities.

The highly funded market in which we operate, particularly in the US, still offers many acquisition opportunities and we are well positioned to capitalize on those that meet our disciplined acquisition criteria.

We believe we are well positioned, with a strong offering and deep expertise, to meet the evolving needs of the specialized market we serve. We are confident that we will continue to strengthen our foundation by creating and seizing opportunities for long-term value creation.

Thank you, everyone. We’ll now be happy to answer your questions.

Thank you, ladies and gentlemen.

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First, we will hear from Amir Patel at CIBC Capital Markets. Please go ahead.

Hi, good morning.

Rich, Richard. Uh, are you able to comment on how sales have fared in, uh, in Q2 so far for, uh, for both the manufacturers and, uh, retailers?

Month as well. So Eastern Canada. We see and you know, regain in the construction industry for multiple you know, building that are being built. So basically it's positive, the only Market in Canada. That's that is going not very well, is the Ontario Market. We're down by 4% in the Ontario Market, while the western Canada is up by 3%. And, uh, and in the US at this, we are already mentioned the gold in the US. So, so, basically, is, is doing well, in the, in the circumstances, even though we have the retailers Market, which is very, which is flat, you know, it's a, if we we constant communication with the retailers in Canada and they all, they all have a negative positive p p sales. So so basically, we I think this Market is going to come back.

Great. Thanks Richard. And, and just looking at, you know, q1 organic growth was 2%. Uh, what was the price and and volume sort of composition, composition that that got you to 2%.

Uh, I mean, just to complete. Also, the, uh, your, your previous question the month of March is pretty pretty aligned with what you've seen in the, in the first.

We were still seeing growth in March and, uh, in the beginning of April as well.

And regarding, uh, regarding the, um, um, the the price increase versus the volume. It's pretty much the, the increase you you're seeing in the US is pretty much, uh, pricing freeze driven in Canada. It's a 50/50 price increase and and volume.

It's a great. Uh thanks Antoine. That's that's helpful. And and just the last question I have before I jump back in the queue uh even a margins uh 9.3% uh in the quarter. What are you expecting for full year 2026? And and how do you think about where longer term margins? Uh, might stabilize.

Uh, first of all, you, you understand that the first quarter is always the software quarter of the uh, of the year. So you will see the uh, the ebit the increase in the next, uh, 3 periods, for sure. Uh, the IBM margin should be similar or slightly higher than uh, than last year if you uh, look at Q2 Q3 and Q4. So we've uh, delivered 10.9 last year, we should be slightly over that as we already uh, communicated to to, to you guys. What we're looking for is for a bit between 12 and 13%. So that's uh, at the end of the day that's what we are. We are heading for, but uh for 2020 2026, should be a uh, around the 11% Mark 1 thing. I may have that you guys need to understand is that

Yes, the uh foreign exchange had an impact in in q1, but the tariffs also are impacting uh the uh the ebit margin in percentage. So we've always said that we would pass the the the Tariff dollar. So no impact on the dollar but as an impact on the uh, on the aid, the margin

And when do you have a sense of maybe how many basis points that represented?

2.

Okay, great. That's all I have for now. I'll turn it over. Thanks.

Thank you. Next question will be from Zachary, Evercore, at National Bank. Please go ahead.

Hey, thanks for taking my question. Um, last quarter, you were hopeful for a continuation of the year-over-year margin expansion in Q1. Uh, we heard about the FX impact, which is about 30 to 40 basis points, and the tariff pass-through impact, which is about 20 basis points. Anything else happened in the quarter that pushed down on the year-over-year comparison versus Q1 last year?

Now if you exclude the Zack, the uh, the effects impact you would be slightly higher than the than last year. And the Tariff impact also has a has a is impacting negatively, the the margin percentage. So if you exclude, that we would be higher than last year.

Gotcha. Thanks, and, uh, drove the pressure on retailers in Canada this quarter. You mentioned negative POS data. Um, but last quarter, we had a, a large non-recurrence of a seasonal order. Anything notable this quarter?

No, the business is still flat as we speak, but we hope that the demand is to come. I think the construction is going to improve.

Because many of the retailers sell to the contractor as well. So, basically, the consumer will have to spend one day or another. You know, the past few business is, is, is going to be, you know? So that's a project that the consumers will do soon as well, for which we have many products. So, basically, we hope that the market should not be that bad with the hardware retailers.

Thank you very much.

and uh,

Given the resurgence in mortgage rates in the U.S., are you seeing any changes in the willingness to transact from sellers in your M&A pipeline? Maybe they're throwing in the towel?

No, the m&a pipeline is uh is healthy in the US in the US as well. So, we we've signed 2 letter of intent in Canada. We have uh, other opportunities that uh, uh, we're hoping to close uh soon, but uh, it's it's very healthy as we speak.

Coming back, Zack to the hardware as well. I think we already, we already told you that we we're going to gain some business with lows in the US that will represent something between the something like 10 million dollar per year and that project should start in the third and the fourth quarter of this year.

Perfect. Thanks.

And, uh, despite the turmoil we're seeing in global markets, no change to your expectations for roughly plus or minus $100 million in added revenue through M&A.

Yes, sir. No problem at all, that will be Rich. That should be Rich.

Beauty. Thanks, I'll turn it over.

Thank you.

Ladies and gentlemen, a reminder to please press star 1 if you have any questions. Thank you.

And at this time, Mr. Law, it appears we have no other questions. Please proceed.

Thank you very much, all of you. So, we are always happy to answer your questions if you call us. Bye-bye.

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