* Q2 EPS C$0.52 vs C$0.51 a year earlier
* Revenue up 2.1 percent
* Same-store sales up 0.9 percent
* Shares hits one-year low, down more than 7 pct
(Adds analyst's comments, share activity, comments from
By Solarina Ho
TORONTO, Aug 11 Rona Inc RON.TO, Canada's
biggest home improvement chain, said on Wednesday its quarterly
earnings rose nearly 12 percent but the results failed to
impress the market and its shares dropped as much as 7 percent
to near one-year lows.
Rona, which operates a network of about 700 stores, said a
still-buoyant housing market supported sales in the early part
of the second quarter but that sales tapered off as consumer
confidence flagged, the housing market cooled, and unfavorable
weather hit several regions of the country.
The Boucherville, Quebec-based company was cautious about
the outlook for the second half of the year. Rona executives
said during the conference call that there was an improvement
in business activity in July, but that it is expecting a slow
"The fact that they're down more than the market suggests
that people are disappointed by the earnings as well as
management's quasi-conservative outlook," said analyst Candice
Williams of Canaccord Genuity.
She noted that Canadian specialty hardware distributor
Richelieu Hardware Ltd (RCH.TO) posted a 57 percent jump in
second quarter earnings last month, and said that economic data
in April and May suggested Rona's results would be stronger.
ATTRACTING NEW DEALERS
Net earnings rose to C$67.8 million ($65 million), or 52
Canadian cents a share, for the period ended June 27. That
compares with a profit of C$60.8 million, or 51 Canadian cents,
for the same quarter a year earlier.
Analysts had forecast earnings of 59 Canadian cents a
share, according to Thomson Reuters I/B/E/S.
Total revenue rose 2.1 percent to C$1.4 billion, while
same-store sales climbed 0.9 percent.
Over the last six months, Rona has added 700,000 new square
feet of retail space.
"It seems positive that they are managing to actually
translate a poor environment into attracting new dealers,"
Rona stock was down 80 Canadian cents, or 5.6 percent, at
C$13.45 on the Toronto Stock Exchange at midafternoon on
Wednesday after falling as low as C$13.17. Volume was
significantly above average with more than 3.9 million shares
"At these share price levels, we think if someone can be
patient and wait out a return in the housing market, they're
likely to get good performance out of the shares," Williams
(Reporting by Solarina Ho; editing by Peter Galloway)