Rona turnaround efforts paying off as profit rises; shares surge
TORONTO Feb 17 (Reuters) - Canadian home improvement retailer and distributor Rona Inc on Tuesday reported higher fourth-quarter sales and earnings as traffic and customer spending rose and expenses fell.
Shares of the Boucherville, Quebec-based company, which has been working to return to growth following its restructuring efforts in 2013, were up 8.4 percent at C$14.00 in midday Toronto Stock Exchange trading.
Comparable-store sales rose 6 percent at the retail unit, their second quarterly increase in a row, and 9.3 percent at the distribution unit.
Last year was the company's first for same-store sales growth since 2006, Rona said.
The company had reduced annual costs by C$110 million ($88.55 million) in 2013 by cutting jobs, closing stores and selling assets, and had said it would focus on sales growth in 2014.
Fourth-quarter net income was C$1.7 million, or 2 Canadian cents a share, compared with a year-earlier loss of C$1.1 million, or 1 Canadian cent per share.
Adjusted earnings from continuing operations, or operating profit before items including finance costs and income tax expenses, rose to 15 Canadian cents a share from 4 Canadian cents.
Analysts on average had expected 12 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose 3.2 percent to C$971.3 million, beating analysts' expectations of C$957.6 million.
The company had net debt of $169.9 million at the end of the quarter.
($1 = 1.2422 Canadian dollars) (Reporting by Solarina Ho; Editing by Lisa Von Ahn)
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