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1. Company Snapshot

1.a. Company Description

Richelieu 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.

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1.b. Last Insights on RCH

Richelieu Hardware Ltd.'s recent performance was negatively impacted by decreased net earnings, despite a strong 8.6% sales increase driven by strategic acquisitions. The company's Q1 2025 earnings call highlighted challenges from tariff impacts, which likely contributed to the decline in net earnings. Additionally, the company's Q1 results, released on April 10, 2025, showed a decrease in net earnings, which may have weighed on the stock's performance.

1.c. Company Highlights

2. Richelieu Hardware's Q4 Earnings: A Strong Finish to a Solid Year

Richelieu Hardware reported a robust fourth-quarter performance, with sales reaching $511 million, representing a 7.3% year-over-year increase driven by a combination of acquisitions and internal growth. EBITDA rose 9.1% to $59.2 million, resulting in an EBITDA margin of 11.6%. The company's diluted earnings per share (EPS) was reported at $0.46, a 4.5% increase from the prior year. For the full year, total sales amounted to $1.96 billion, up 7.2%, while EBITDA grew 6.2% and cash flow from operations reached $202 million. Notably, the actual EPS figure was not disclosed, but it was relative to estimates of $0.3.

Publication Date: Jan -18

📋 Highlights
  • Q4 Sales Growth:: Fourth-quarter sales rose 7.3% to $511 million, driven by acquisitions and internal growth.
  • EBITDA Expansion:: Q4 EBITDA increased 9.1% to $59.2 million, with a margin of 11.6%.
  • Full-Year Cash Flow:: 2023 cash flow from operations reached $202 million, supported by $1.96 billion in total sales (+7.2% YoY).
  • Acquisition Impact:: 10 acquisitions over 13 months added ~$100 million in sales, including three U.S. McKillican distribution centers.
  • Liquidity Strength:: Closed the year with $622 million in working capital, minimal debt, and a positive cash position.

Acquisition-Driven Growth and Operational Efficiency

Richelieu completed three acquisitions during the year, including Ideal Security, Finmac Lumber, and Klassen Bronze, contributing to its growth trajectory. Over 13 months, the company executed 10 acquisitions in Canada and the U.S., adding approximately $100 million in sales. The recent acquisition of McKillican American distribution centers further expanded its reach. The company's business model has demonstrated resilience and flexibility, enabling it to respond effectively to customer needs and protect its margins.

Outlook and Valuation

For 2026, Richelieu expects to continue its growth, with organic growth rates in Q1 so far being flat for hardware sales to retailers and around 5% for manufacturers. The company targets an EBITDA margin slightly above 11% for the year. Analysts estimate revenue growth at 3.6% for next year. With a current P/E Ratio of 27.62 and an EV/EBITDA of 12.07, the market appears to have priced in a certain level of growth. The company's strong cash position, minimal debt, and working capital of $622 million provide a solid foundation for future acquisitions and investments.

Return Metrics and Dividend Yield

Richelieu's return metrics, including an ROIC of 8.07% and an ROE of 9.02%, indicate a decent return on capital employed. The company's dividend yield stands at 1.43%, providing a relatively stable source of return for investors. With a Free Cash Flow Yield of 7.95%, Richelieu appears to be generating sufficient cash to support its growth initiatives and reward shareholders.

3. NewsRoom

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Richelieu Hardware Ltd. (TSE:RCH) Is Up But Financials Look Inconsistent: Which Way Is The Stock Headed?

Feb -04

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Richelieu Strengthens Its North American Offering with the Acquisition of Klassen Bronze

Jan -19

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Andean Precious Metals And These 2 Canadian Small Caps Are Undiscovered Gems

Jan -19

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Is It Too Late To Consider Buying Richelieu Hardware (TSX:RCH) After Recent Share Price Gains?

Jan -17

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A Look At Richelieu Hardware (TSX:RCH) Valuation After Dividend Raise And Acquisition Milestone

Jan -17

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Richelieu Hardware Ltd (RHUHF) Q4 2025 Earnings Call Highlights: Strong Revenue Growth and ...

Jan -16

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Richelieu Hardware Q4 Earnings Call Highlights

Jan -15

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Richelieu Hardware Q4 Net Earnings and Sales Advance, Announces Dividend Increase

Jan -15

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.83%)

6. Segments

Manufacturing

Expected Growth: 12%

Richelieu Hardware Ltd.'s 12% growth in manufacturing is driven by increasing demand for renovation and construction projects, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on innovative products, operational efficiency, and strong supplier relationships contribute to its growth momentum.

Retailers

Expected Growth: 18%

Richelieu Hardware Ltd.'s 18% growth is driven by increasing demand for home renovation and decoration, expansion into new markets, strategic acquisitions, and effective inventory management. Additionally, the company's focus on e-commerce and digital transformation has improved customer experience, leading to increased sales and market share.

7. Detailed Products

Decorative Hardware

Richelieu offers a wide range of decorative hardware products, including knobs, handles, and hinges, designed to enhance the aesthetic appeal of cabinets, furniture, and other decorative pieces.

Functional Hardware

Richelieu's functional hardware products, such as drawer slides, hinges, and soft-close systems, provide smooth operation and durability for various applications.

Specialty Hardware

Richelieu's specialty hardware products, including magnetic catches, lid stays, and soft-close systems, offer innovative solutions for unique applications.

Organizational Systems

Richelieu's organizational systems, including shelving, storage, and display solutions, help optimize space and improve functionality.

Lighting and Electrical

Richelieu's lighting and electrical products, including LED lighting, under-cabinet lighting, and electrical accessories, provide innovative solutions for various applications.

Surface Technologies

Richelieu's surface technologies, including laminate, solid surface, and quartz, offer durable and stylish solutions for countertops, worktops, and other surfaces.

8. Richelieu Hardware Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Richelieu Hardware Ltd. faces moderate threat from substitutes, as customers have limited alternatives for hardware products.

Bargaining Power Of Customers

Richelieu Hardware Ltd. has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

Richelieu Hardware Ltd. relies on a few large suppliers, giving them significant bargaining power.

Threat Of New Entrants

Richelieu Hardware Ltd. operates in a capital-intensive industry, making it difficult for new entrants to join the market.

Intensity Of Rivalry

Richelieu Hardware Ltd. operates in a highly competitive market, with several established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.79%
Debt Cost 8.71%
Equity Weight 93.21%
Equity Cost 8.78%
WACC 8.78%
Leverage 7.29%

11. Quality Control: Richelieu Hardware Ltd. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Richelieu Hardware

A-Score: 5.6/10

Value: 5.0

Growth: 5.9

Quality: 5.9

Yield: 3.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Bassett Furniture

A-Score: 5.1/10

Value: 5.8

Growth: 1.3

Quality: 4.2

Yield: 9.0

Momentum: 5.0

Volatility: 5.0

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Hooker Furnishings

A-Score: 5.0/10

Value: 9.6

Growth: 1.0

Quality: 4.8

Yield: 9.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

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American Woodmark

A-Score: 4.1/10

Value: 7.9

Growth: 6.0

Quality: 4.8

Yield: 0.0

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

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Virco Mfg

A-Score: 3.9/10

Value: 5.1

Growth: 8.2

Quality: 3.6

Yield: 2.0

Momentum: 0.0

Volatility: 4.3

1-Year Total Return ->

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MasterBrand

A-Score: 3.7/10

Value: 7.4

Growth: 4.7

Quality: 4.3

Yield: 0.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

44.38$

Current Price

44.38$

Potential

-0.00%

Expected Cash-Flows