May 9, 2012 / 4:13 PM / 6 years ago

UPDATE 3-Rona says its loss narrowed and it's not for sale

* Net loss C$0.10/shr, vs C$0.13 a year earlier

* Revenue up 1.8 percent at C$934.9 mln

* Same-store sales fall 0.8 pct

* Shares drop 1.5 pct on Toronto Stock Exchange

TORONTO, May 9 (Reuters) - Canada’s Rona Inc said on Wednesday its quarterly loss narrowed as it controlled costs, and a decline in sales at its established home-improvement stores - its seventh in a row - was less precipitous than a year earlier.

Even so, its shares dipped as the loss came in slightly larger than analysts had expected, and the company vehemently denied recent speculation that it was on the block.

“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,” Chairman Jean Gaulin said at its annual meeting. Gaulin also announced he will soon step down.

Shareholders “want to keep this company a Canadian company,” Chief Executive Robert Dutton said. “They choose Rona. They don’t choose American businesses. And we have to remember that.”

In early April, Rona’s shares rose after the chief financial officer of U.S.-based Lowe’s Cos Inc said Rona was a “very interesting company,” and that Lowe’s was open to all options should its Canadian competitor put itself up for sale.

On Wednesday, shares of Rona closed down 1.7 percent at C$10.14 on the Toronto Stock Exchange.


Rona, once Canada’s dominant do-it-yourself retailer, has fared poorly as Lowe’s and Home Depot, the two largest U.S. home improvement retailers, have expanded north of the border.

Rona’s net loss for the quarter ended March 25 narrowed to 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.

The company’s quarterly results benefited from lower depreciation and finance costs and a push to improve its efficiency, but sales at established stores, an important measure for retailers, fell 0.8 percent.

National Bank Financial analyst Vishal Shreedhar wrote in a note to clients that the decline was surprisingly small given a 12.6 percent drop in the same quarter last year, but he also said the results were largely in line with his expectations.

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 extended into April.

Even so, it said its outlook was still conservative, given “consumer caution and low confidence levels.”

In February, Rona said it would focus less on big-box stores and would close or reduce the size of 23 of its biggest outlets to stay competitive. It said research showed that customers cared most about the proximity of its stores.

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