Hillman Solutions (NASDAQ:HLMN) used its first Investor Day to outline a multi-year growth strategy anchored in “owning and expanding the core” retail business while broadening its reach into professional end markets through pro distribution, lumber and building materials (LBM), and industrial MRO channels. Executives described the plan as a continuation of a long-standing customer-first operating model, supported by a larger addressable market estimate and a disciplined framework for capital allocation and returns.
Strategy blueprint and expanded market opportunity
President and CEO Jon Michael Adinolfi (“JMA”) said Hillman has built a category-leading position over more than 60 years, citing approximately $1.6 billion in revenue and EBIT margins of 17.7%. He emphasized that the company’s go-forward strategy is not a shift away from retail, but an expansion of where Hillman can apply its core capabilities.
The company presented a five-year objective to grow to $2.5 billion+ in revenue, supported by a stated long-term framework that includes:
- 8%–12% average revenue CAGR over five years
- Low double-digit EBITDA growth
- Net leverage of 2.5x and below, with a path back to that level if acquisitions temporarily raise leverage
- An increased emphasis on ROIC as a central decision metric for organic investment and M&A
JMA also pointed to operating improvements over the last several years, including gross margin expansion of more than 600 basis points, net EBITDA improvement of 300 basis points, and leverage reduction of more than two turns.
Retail core: scale, field execution, and category expansion
EVP of Sales Brett Hillman described the “core” as existing categories sold to existing customers and said Hillman’s competitive position is built on scale, breadth, and a direct-to-store operating model. He cited an assortment of more than 111,000 SKUs sold into 29,000 retail locations, with the average store carrying more than 8,000 Hillman products.
He highlighted what he called six core competencies, including product breadth, innovation, category management, a 1,200-person field sales and service team, direct-to-store distribution, and global sourcing. He also said customer relationships are “sticky,” noting no single category at a single customer represents more than 4% of company revenue.
On growth, Brett Hillman said the company plans to expand through additional shelf space wins in existing categories and by entering new categories where it believes it can be a leader. He cited examples including displacing a competitor in hinges at a big box retailer, launching a “Tool Rig” solution for pros, and displacing a competitor in Rope and Chain at a large hardware chain.
He pointed to Power Pro 4.0 as a recent innovation highlight, saying development took three years and the product launched in 2024. Management framed Power Pro as a key brand for serving both DIY and pro users.
RDS: Minute Key platform and automotive key growth
Scott Moore, Divisional President of Robotics and Digital Solutions (RDS), said the segment generated $220 million in net sales last year and operates a kiosk-based model with a focus on quality, convenience, competitive pricing, and a 100% money-back guarantee. Moore said customers have cut more than 300 million keys on Minute Key machines.
Moore described RDS’s installed base as including more than 3,000 kiosks in high-traffic retail locations, plus a manual key business with about 9,000 store-associate-operated machines, pet tag engraving machines (about 7,000), and Resharp machines (about 1,000). He said machines are designed and assembled in the U.S. at the Tempe facility and that the fleet is supported by remote management, predictive maintenance, and data analytics. Moore said RDS maintains 99% uptime and resolves more than 90% of issues without store involvement.
Moore said the latest Minute Key platform (version 3.5) enables new growth avenues including auto keys (including transponders and smartphone-related options), “Endless Aisle” ordering and shipping, RFID fob capability, and kiosk content management for advertising. He said the company is already doing 18,000 Endless Aisle orders per month.
On automotive, Moore described the market as a $250 million opportunity where Hillman has less than 10% share today and said the company believes it can reach 30%. He attributed the opportunity to combining an existing retail auto-key program with a broader kiosk footprint, describing auto key duplication as a faster, lower-cost alternative to dealerships. In Q&A, Moore said RDS expects “steady, predictable” growth, and JMA said the company is pleased with 2025 performance and expects improvement in 2026.
Supply chain “moat” and the Cincinnati “DC of the future”
EVP of Global Supply Chain Bob Davis argued margin gains have been driven by structural supply chain actions rather than temporary market conditions. Davis described an end-to-end model in which Hillman manages sourcing, planning and procurement, ocean transit, customs clearance, distribution centers, and final-mile delivery.
A central theme was Hillman’s “dual faucet” sourcing strategy, which Davis said allows the company to shift production between countries by pre-qualifying suppliers and maintaining alternate capacity. He gave an example in umbrellas, describing how Hillman shifted sourcing between China and India as tariff levels changed. Davis said the company reduced China sourcing dependency from 49% in 2018 to 32% in 2025, and said Hillman has the capability—but not a mandate—to reduce China exposure down to 10%.
Davis said Hillman has opened more than 45 factories in other Southeast Asian countries with long-term suppliers over the past 18 months and plans to open another eight this year. He also contrasted lead times, saying new suppliers can require roughly 150 days from purchase order to ship date, while established partners can ship in about 45 days, reducing inventory needs and supporting cash flow.
On distribution, Davis said Hillman operates 24 distribution centers across North America, reaches 97% of customers in two days and 85% in one day, and turns orders in 24 hours with a 98% fill rate. He also discussed a 715,000-square-foot automated distribution facility being built in Cincinnati—described as a “DC of the future”—that will consolidate multiple aging facilities, use goods-to-person automation and other advanced systems, and support retail, pro, and e-commerce fulfillment.
Winning the Pro: retail pro, specialty distribution, and LBM “yard” opportunity
JMA framed pro growth around serving both “unplanned” purchases (often at retail or showroom counters) and “planned” purchases (bulk job-lot orders). He said Hillman is already a pro supplier, citing about $400 million of pro revenue today across:
- $215 million retail pro
- $200 million pro distribution
- $35 million industrial MRO
SVP of Pro James Daly said Hillman’s retail partners are building dedicated pro divisions and expanding bulk distribution and job-site delivery capabilities. Daly said Hillman’s pro advantages include existing pro-grade products (repackaged for pro buying), sourcing scale, an experienced pro sales team, and balance sheet capacity.
Chris Martin, who leads specialty distribution and industrial MRO, highlighted Hillman’s ST Fastening Systems business in Tyler, Texas, calling it a $100 million platform serving engineered applications such as metal roofing. Martin emphasized that professional fastener customers need both high-volume construction fasteners and specialized, engineered SKUs, and argued Hillman’s sourcing scale and SKU management capabilities translate from retail into professional distribution.
JMA also discussed an LBM strategy focused on expanding beyond the showroom to the yard. He said Hillman has about $100 million of LBM business today primarily tied to showroom, unplanned purchases, and that the growth opportunity is planned purchases in job-lot quantities for the yard. Management said it has begun adding LBM specialist resources and will tailor packaging, quantities, and application-specific products to meet that demand.
M&A approach: accelerating growth with ROIC discipline
Investor Relations and M&A lead Michael Koehler said Hillman’s acquisition strategy is designed to compound accretive growth while prioritizing returns. He said Hillman has completed around 30 successfully integrated transactions and targets deals that can benefit from the company’s sales reach, supply chain leverage, and category management capabilities. He outlined three focus areas for potential acquisitions: expanding categories, pro distribution, and industrial MRO.
Koehler cited “near neighbor” retail categories such as plumbing and electrical as acquisition-oriented opportunities and said industrial MRO traction is expected to be M&A-driven. He described Hillman’s typical deal range by referencing two 2024 transactions—Koch and Intex—each in the “mid-$30 million range,” while noting flexibility to pursue larger deals when strategically warranted. He also said Hillman believes it can invest organically, repurchase shares under its buyback program, and execute M&A concurrently.
As an example, Koehler described the January 2024 acquisition of Koch Rope and Chain, saying Hillman waited more than three years for the right valuation and then used its platform to drive a nationwide rollout at a major retailer that resulted in 20% top-line growth for Koch. He also said the category is sourced 100% overseas today and that additional targets could expand Hillman’s presence in industrial MRO and potentially add supply chain flexibility.
About Hillman Solutions (NASDAQ:HLMN)
Hillman Solutions (NASDAQ:HLMN) is a leading provider of hardware and related products to the home improvement, retail, industrial and manufacturing markets. The company’s portfolio encompasses key duplication systems and security solutions, hardware essentials such as fasteners and anchors, signage and labeling products, and outdoor and seasonal items. Hillman’s product offerings are sold through a network of major home improvement retailers, wholesalers, independent distributors and other specialty outlets.
Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman grew from a family-run enterprise into a global supplier of hardware solutions.
