UPDATE 2-Rona posts loss, hurt by charges, tough markets
By Solarina Ho
TORONTO Aug 14 (Reuters) - Rona Inc, Canada's largest home-improvement retailer and distributor, reported a wider-than-expected second-quarter loss on Wednesday, weighed down by restructuring costs and tough market conditions.
Results sent Rona shares down as much as 4.5 percent. Shares were off 2.6 percent at C$10.97 in early afternoon trading.
The Boucherville, Quebec-based company, under pressure from U.S. rivals Home Depot Inc and Lowe's Cos Inc, reshuffled its board, named a new chief executive and launched a business recovery plan earlier this year.
Rona, which is closing a number of unprofitable stores, said quarterly sales fell, due in part to the store closures but also because of bad weather, a strike in the construction industry in Quebec, and a decline in new home construction.
"What we're seeing with Rona here is continued challenge on the top line that's really getting reflected in the company's overall bottom line results," said Derek Dley, a retail analyst at Cannacord Genuity, noting that sales declined for the 12th consecutive quarter after adjusting for extra weeks.
"Over the balance of the year and the beginning of next year, I still think what we're going to see is a very challenging and soft home renovation and spending market."
Canadian housing data last week showed new home construction fell slightly in July from June, while building permits issued for the residential sector fell 12.9 percent in June. Continued...