leadf
logo-loader
viewRona Inc

Rona misses Street estimates for Q2

hard_helmet_350_4e42dbaa3b018.jpg

Home improvement retailer Rona (TSE:RON) reported second-quarter profit dipped 40%, hurt by poor weather and cash-strapped consumers, it said, sending its stock down.

The Quebec-based company’s shares dropped 4.85% to $10.20 late Wednesday on the Toronto Stock Exchange.

For the three months ending June 26, revenue fell 2.4% to $1.37 billion.

The company said the decrease stems from a 9.6% drop in same-store sales – a key indicator to a company’s financial health – including average deflation of 0.8% in forest-product prices.

Rona said the slowdown in same-store sales was partially offset by acquisitions, which added $98.6 million in sales to its consolidated revenues, for growth of 7.0%.

Net income came in at $37 million, or 28 cents per diluted share, versus $66.3 million, or 51 cents per diluted share, a year ago.

Wall Street forecasted 40 cents a share of earnings, on revenue of $1.42 billion.

Rona said that the Ontario region was less affected by lower sales, whereas in Western Canada, particularly in British Columbia, the decline had a greater impact.

Revenue in the kitchen and install services categories were relatively solid for the quarter and rose sharply in July, it added.

Sales of lumber and construction materials were weak since the start of the year and only began to strengthen in early July.

"Although the pressure on sales, and the promotional activities demanded by the context affected our earnings, we have managed the situation very prudently,” said CEO, Robert Dutton.

The company said it reduced same-store retail and distribution inventories by $15 million, while also lowering its same-store administrative expenses by 10%.

Despite Rona’s streamlining of operations, it expects continued pressure on same-store sales for the rest of the year, it said.

Quick facts: Rona Inc

Price: - CAD

TSX:RON
Market: TSX
Market Cap: -
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Mirasol Resources Interim CEO has a vision for the company as he looks to...

Mirasol Resources (CVE: MRZ-OTCPK: MRZLF) CEO Patrick Evans joined Steve Darling from Proactive to provide his thought on the company as their new CEO. He provides views with a background on himself and why he took on the role. Evans also told Proactive about where their strong stable of...

9 hours ago

2 min read