3 Min Read
(Reuters) - Canadian home improvement retailer Rona Inc RON.TO reported a smaller quarterly loss on Wednesday and said again it is not for sale.
Chairman Jean Gaulin, who announced he will step down, told shareholders at the company's annual meeting that in the five years in the job he has seen strong growth and, more recently, challenges from "an ever-changing environment". But he said Rona has the right plan, and the right team in place to implement it.
"Rona is not up for sale. Not part of it, not all of it, not bits and pieces of it. It's not for sale," he said to sustained applause.
In early April, the chief financial officer of competitor Lowe's Cos Inc (LOW.N) told Reuters that Rona was a "very interesting company," and that Lowe's was open to all options should the Canadian chain put itself up for sale.
The Lowe's comments pushed up Rona's stock despite the Canadian company's denial that it was up for sale. Early on Wednesday afternoon, shares of Rona were down 1.4 percent at C$10.17 on the Toronto Stock Exchange.
The company's quarterly results were helped by lower depreciation and finance costs, but sales at established stores, a key measure for retailers, fell 0.8 percent. Rona said consumers are still cautious, but that same-store sales rose 4.2 percent at stores that specialize in building supplies.
"This demand for building materials bodes well for the coming months because it usually signals the start of bigger construction and renovation projects," Rona said in a release.
The company, which operates about 800 stores across Canada, also said overall same-store sales were positive in February and March, a trend that continued in April.
It said its outlook was still conservative, however, given "consumer caution and low confidence levels".
In February, Rona said it would refocus away from big-box stores and would close or reduce the size of 23 of its biggest outlets in a push to stay competitive. It said research showed that customers cared most about the proximity of its stores.
Rona's net loss for the quarter ended March 25 was C$13.3 million ($13.2 million), or 10 Canadian cents a share, compared with a loss of C$17.6 million, or 13 Canadian cents, a year earlier. Analysts, on average, had expected a loss of 8 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose 1.8 percent to C$934.9 million, helped in part by stores opened in 2011.
Reporting By Allison Martell; Editing by Peter Galloway