TORONTO (Reuters) - Rona Inc RON.TO, 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.
The results sent Rona shares down nearly 4 percent to C$10.83 in morning trading.
The Boucherville, Quebec-based company, under pressure from U.S. rivals Home Depot Inc (HD.N) and Lowe’s Cos Inc (LOW.N), 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.
The retailer said results were also impacted by asset sales, investments in promotions, inventory liquidation and restructuring-related costs.
It said its recovery plan and annualized cost-savings target of C$110 million were on track. CEO Robert Sawyer said 2013 was “a year of transition for Rona,” adding that “market conditions are difficult.”
The company recorded charges of $62.8 million for restructuring, writing down the value of non-financial assets and other steps in its recovery plan.
Its net loss was C$141 million, or C$1.19 a share, compared with net income of C$38.1 million, or 28 Canadian cents a share, a year earlier.
Revenue fell 4.6 percent to C$1.25 billion, while comparable store sales dropped 1 percent. Store closures reduced revenue by C$35.1 million.
Analysts’ average forecast was a loss of C$1.03 per share on revenue of C$1.39 billion, according to Thomson Reuters I/B/E/S.
Rona said its loss from continuing operations attributable to participating shares totaled C$38.7 million, or 32 Canadian cents a shares, compared with earnings of C$35.6 million, or 29 Canadian cents a share, a year earlier.
Reporting by Solarina Ho; Editing by Gerald E. McCormick and John Wallace