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Richelieu Hardware (TSE:RCH)
TSX:RCH
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Richelieu Hardware (RCH) AI Stock Analysis

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TSE:RCH

Richelieu Hardware

(TSX:RCH)

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Neutral 60 (OpenAI - 5.2)
Rating:60Neutral
Price Target:
C$37.00
â–²(4.25% Upside)
Action:Reiterated
Date:07/11/26
The score is held back primarily by weak technical conditions (downtrend vs key moving averages and bearish momentum). Financial fundamentals are steady with conservative leverage and positive cash generation, but margin compression and uneven free cash flow growth limit upside. Valuation is moderate-to-rich for the current profitability profile, while the latest earnings call supports the outlook via acquisitions and expected second-half improvement despite tariff and working-capital headwinds.
Positive Factors
Conservative balance sheet
Moderate leverage and a growing equity base provide financial resilience, preserve capacity for acquisitions and capital investment, and reduce dependence on external financing as the company manages cyclical demand.
Negative Factors
Sustained margin compression
Profitability remains materially below prior peak levels, limiting earnings resilience and reducing the benefit of revenue growth. Tariff-related gross-margin pressure may persist if costs cannot be fully passed through to customers.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Moderate leverage and a growing equity base provide financial resilience, preserve capacity for acquisitions and capital investment, and reduce dependence on external financing as the company manages cyclical demand.
Read all positive factors

Richelieu Hardware (RCH) vs. iShares MSCI Canada ETF (EWC)

Richelieu Hardware Business Overview & Revenue Model

Company Description
Richelieu Hardware Ltd., a company founded in 1968 and headquartered in Montreal, Canada, is a leading North American entity involved in the manufacturing, importing, and distribution of a wide variety of specialized hardware and complementary pro...
How the Company Makes Money
Richelieu makes money primarily by selling specialty hardware and related products to business customers (B2B). Its core revenue model is product distribution: the company sources items (through importing from third-party suppliers and purchasing ...

Richelieu Hardware Earnings Call Summary

Earnings Call Date:Jul 09, 2026
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Oct 08, 2026
Earnings Call Sentiment Positive
The call presents a generally positive operational and strategic picture: organic growth in core markets, successful acquisition activity adding roughly CAD 45 million in run-rate sales, EPS and EBITDA up modestly, and continued product leadership and market penetration. Offsetting these positives are margin pressure from tariffs, a build in working capital that reduced H1 cash flow, soft performance in Ontario and the U.S. retail channel, and higher near-term cash outflows for financing and inventory. Overall the company appears to be growing and executing on M&A and product strategy while managing temporary margin and working capital headwinds.
Positive Updates
Total Sales Growth
Q2 total sales of CAD 532.1 million, up 3.9% year-over-year (would have been +5.0% at comparable exchange rates). First half sales nearly CAD 1.0 billion, up 4.4% (5.9% on a comparable exchange rate).
Negative Updates
Margin Pressure from Tariffs
Gross margins declined ~200 basis points year-over-year, with EBITDA margin slightly down to 10.6% in Q2 from 10.8% last year (Q2 EBITDA increase only +1.7%). Management attributes most of the compression to tariffs that increased both sales and cost of sales.
Read all updates
Q2-2026 Updates
Negative
Total Sales Growth
Q2 total sales of CAD 532.1 million, up 3.9% year-over-year (would have been +5.0% at comparable exchange rates). First half sales nearly CAD 1.0 billion, up 4.4% (5.9% on a comparable exchange rate).
Read all positive updates
Company Guidance
Management's guidance emphasized continued acquisition-driven growth and margin recovery: management has closed four acquisitions YTD (one in Q1 U.S., one in Q2 Quebec, two post-quarter) adding roughly CAD45M of annual sales and is evaluating several more, while a U.S. box program that began in June should add about CAD10–12M of annual sales; they expect the second half to be stronger, will invest in additional U.S. salespeople, and remain positioned to pursue attractive targets. Key metrics called out include Q2 sales CAD532.1M (+3.9%; 1.8% organic / 2.1% acquisitions), H1 sales ~CAD1.0B (+4.4%; 1.9% organic / 2.5% acquisitions), Q2 EBITDA CAD56.1M (10.6% vs 10.8% LY), H1 EBITDA CAD99.4M (10.0%), a full‑year EBITDA target around 11% (longer‑term 12–13%), gross margin pressure from tariffs (≈200 bps gross margin decline vs ~20 bps EBITDA impact), Q2 net income CAD23.2M (EPS CAD0.42), H1 net income CAD37.6M (EPS CAD0.68), Q2 cash from operations before working capital CAD47.9M (operating inflow CAD19.4M), H1 operating inflow CAD36.6M, working capital CAD629.5M, DSO ~45–46 days, expected H2 inventory reduction CAD5–10M, YTD investments CAD26M (including CAD15.3M for acquisitions and CAD10.7M equipment) with full‑year CapEx guidance ~CAD18–20M, Q2 financing use CAD33.5M (including CAD7.6M share repurchase and CAD8.6M dividends).

Richelieu Hardware Financial Statement Overview

Summary
Financials appear stable with a strong balance sheet (moderate leverage, steadily growing equity) and currently positive cash generation with good cash conversion. The main drag is multi-year margin compression versus 2021–2022 and uneven/softening free cash flow growth recently, which limits the financial performance score despite steady revenue and profitability.
Income Statement
64
Positive
Balance Sheet
78
Positive
Cash Flow
66
Positive
BreakdownTTMNov 2025Nov 2024Nov 2023Nov 2022Nov 2021
Income Statement
Total Revenue2.01B1.96B1.83B1.79B1.80B1.44B
Gross Profit223.02M481.34M450.32M184.33M244.71M206.32M
EBITDA215.62M213.88M201.42M230.40M287.44M234.40M
Net Income87.10M85.82M85.75M111.47M168.39M141.76M
Balance Sheet
Total Assets1.49B1.44B1.39B1.31B1.28B964.18M
Cash, Cash Equivalents and Short-Term Investments28.94M45.52M41.39M46.33M21.22M58.71M
Total Debt305.14M276.91M264.60M209.29M264.13M99.49M
Total Liabilities510.14M479.24M465.13M406.81M464.04M295.24M
Stockholders Equity974.24M961.94M926.51M904.89M817.16M666.44M
Cash Flow
Free Cash Flow170.06M183.93M103.00M228.56M-58.75M87.35M
Operating Cash Flow187.39M199.14M133.56M270.66M-36.17M104.41M
Investing Cash Flow-52.32M-62.27M-50.84M-61.79M-66.83M-66.49M
Financing Cash Flow-117.72M-101.13M-117.87M-72.36M-66.64M-53.69M

Richelieu Hardware Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price35.49
Price Trends
50DMA
36.42
Negative
100DMA
37.76
Negative
200DMA
39.20
Negative
Market Momentum
MACD
-0.32
Negative
RSI
51.18
Neutral
STOCH
53.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCH, the sentiment is Neutral. The current price of 35.49 is below the 20-day moving average (MA) of 35.53, below the 50-day MA of 36.42, and below the 200-day MA of 39.20, indicating a neutral trend. The MACD of -0.32 indicates Negative momentum. The RSI at 51.18 is Neutral, neither overbought nor oversold. The STOCH value of 53.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:RCH.

Richelieu Hardware Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
C$2.61B14.0310.41%0.45%0.26%1.01%
67
Neutral
C$1.71B10.7912.76%5.88%-0.15%-2.29%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
63
Neutral
C$462.87M1.3322.24%381.75%-29.78%88.96%
60
Neutral
C$1.96B22.789.04%1.74%5.69%5.15%
60
Neutral
C$1.98B-16.09-6.74%2.42%-8.09%-196.45%
58
Neutral
C$462.87M1.3322.24%300.37%-29.78%88.96%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:RCH
Richelieu Hardware
35.76
-0.02
-0.07%
TSE:LNF
Leon's Furniture
24.81
-3.09
-11.07%
TSE:TCL.A
Transcontinental
5.37
2.51
87.43%
TSE:TCL.B
Transcontinental Inc. Class B
6.83
2.89
73.62%
TSE:TOY
Spin Master
19.80
-2.20
-10.01%
TSE:WPK
Winpak
44.44
2.83
6.81%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 11, 2026