RONA reports rise in Q2 net earnings
Boucherville, Quebec-based RONA, the Canadian hardware retailer and distributor, saw a distribution sales increase of 8.7% in its second fiscal quarter of 2012, while retail and commercial sales rose 1.8%.
Beginning with the quarter, RONA changed the way it measures comparable-store sales. For the first time, the company is including distribution sales to affiliate dealers, and on that basis, same-store sales rose 1% in the second quarter.
Before the revision, the company had reported seven consecutive quarters of same-store sales declines.
In RONA’s retail and commercial business, same-store sales declined 0.9%. The company attributed the decline to cautious consumers and the mix of products sold.
Excluding unusual items, net earnings rose to C$43.6 million, compared with C$37.0 million in the second quarter of 2011.
In a prepared statement, president and CEO Robert Dutton said the company’s new business strategy, which focuses less on big boxes and more on smaller “proximity” stores, is working.
“The second-quarter results again prove that RONA remains a preferred source for renovation and building contractors and specialists,” Dutton said. “We have, for example, seen 10.5% growth in sales to plumbing specialists, while our affiliate dealers, who count a high percentage of building contractors among their clientele, have increased same-store sales by 11.4%.”
Although the RONA statement referenced the “unsolicited and non-binding proposal [received] from U.S.-based Lowe’s,” it quickly dismissed the offer as “not in the best interests of RONA and its stakeholders.” The proposal was not discussed during the quarterly earnings conference with analysts and investors.