Wednesday, August 8, 2012

Rona adjusted earnings rise on higher sales volume

(Reuters) - Canada's Rona Inc , which Lowe's Cos Inc has offered to buy for C$1.8 billion, said on Wednesday quarterly adjusted earnings rose on higher sales volume at its chain of home improvement stores and its distribution business.

The company, which rejected the U.S-based retailer's C$14.50-a-share proposed offer, said its results also benefited from lower financial costs, amortization and depreciation, and efficiency measures put in place during the second quarter.

Beginning with the second quarter, Rona changed the way it measures same-store sales, a yardstick generally designed to strip out gains from opening new outlets.

For the first time the company is including distribution sales to affiliate dealers, and on that basis the measure rose 1 percent in the quarter. In Rona's retail and commercial business alone, same-store sales fell 0.9 percent.

Rona, Canada's home-grown answer to Lowe's and Home Depot Inc, had reported seven consecutive quarters of same-store sales declines before the revision.

In rejecting the Lowe's proposal, Rona said it would push ahead with its new strategy of focusing on smaller stores that it says customers prefer, while closing some of its big-box outlets that compete more directly with its U.S.-based rivals. Rona is opening its first "proximity" store in Edmonton, Alberta, on Wednesday.

Net earnings attributable to participating shares after a dividend on preferred shares fell to C$34.1 million ($34.2 million), or 28 Canadian cents a share, compared with C$37.0 million, or 28 Canadian cents, a year earlier.

Excluding unusual items, earnings rose to C$43.6 million, or 36 Canadian cents a share, from C$37.0 million, or 28 Canadian cents. Revenue rose 3.4 percent to C$1.42 billion.

Analysts, on average, had expected earnings of 37 Canadian cents a share on revenue of C$1.41 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Allison Martell)

Source: http://news.yahoo.com/rona-adjusted-earnings-revenue-rise-130511030--sector.html

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