(Adds details of results, analyst's comments)
TORONTO May 13 Canadian home improvement
retailer and distributor Rona Inc said on Tuesday that
deep cost-cutting helped to trim its first-quarter loss, but
that a weak market and harsh winter weather hurt sales.
Rona, which has eliminated jobs, closed stores and sold
assets under an aggressive restructuring plan, blamed a 4
percent decline in same-store sales on harsh weather, lower
housing starts, the closure of poorly performing stores and the
renovation of others.
The Boucherville, Quebec-based company reported an adjusted
net loss from continuing operations of C$14.4 million ($13.2
million), or 12 Canadian cents a share, for the quarter ended
March 30, down from a loss of C$18.3 million, or 15 Canadian
cents a share, in the year-before quarter.
Rona's shares were 10 Canadian cents higher at C$11.03 on
the Toronto Stock Exchange in opening trade.
Canaccord Genuity analyst Derek Dley reiterated his "hold"
rating on the shares and his C$11 share target after the
results, calling Rona's performance "another soft quarter" that
lagged his expectations.
"We note this represents the 15th consecutive quarter of
same-store sales declines," he wrote in a report to clients.
"In our view, Rona's operating environment remains highly
challenging given what we view as a cautious renovation spending
market, along with heightened competition."
Rona said its net loss fell to C$16.6 million, or 14
Canadian cents a share, from C$36.1 million, or 30 Canadian
cents a share.
Adjusted operating income, or EBITDA, rose to C$10 million
for the 13-week period from C$1.6 million last year.
Revenue fell 8 percent to C$764.3 million.
Rona, which cut annual costs by C$110 million last year,
said that it will focus on better meeting the needs of key
customers this year. The company said it bolstered its
marketing, supply chain and merchandising last year, while
improving its capital structure.
Rona has about 24,000 employees and operates 500 stores
under several banners as well as a wholesaler and eight
(Reporting by Susan Taylor and Solarina Ho; Editing by Nick
Zieminski and Peter Galloway)