MONTREAL – Home renovations retailer Rona Inc. enjoyed its best quarterly results in more than three years in the second quarter but is starting to see dark clouds in Alberta.

The Quebec-based company said Tuesday that net profit attributable to shareholders was $49.9 million or 46 cents per share for the three months ended June 28. That’s up from $42 million or 35 cents per share a year earlier.

Rona also announced it will boost the company’s annual dividend 14 per cent to 16 cents per share while also moving to a quarterly payout of four cents starting Sept. 25. Previously, it paid an annual dividend of 14 cents, dividend distributed twice a year.

Revenues in Rona’s busiest quarter of the year increased 5.9 per cent to $1.26 billion from $1.19 billion a year ago.

Rona (TSX:RON) had been expected to earn 45 cents per share on $1.25 billion of revenues, according to analysts polled by Thomson Reuters.

The company said retail sales grew 6.7 per cent due to merchandising strategies and the repositioning of the Reno-Depot banner in Quebec, while distribution sales rose 3.7 per cent.

Same store sales — those at stores open at least a year and a key metric in retail — grew 5.4 per cent, well above analyst expectations. Except for the fourth quarter of 2014, it was the highest quarterly sales growth from existing operations since the first quarter of 2010.

CEO Robert Sawyer said the company marked a fourth consecutive quarter of growth despite the ongoing decline in housing starts across the country and a stagnant economy.

“We remain cautious with a challenging outlook for the Canadian housing market and the modest expected consumer spending growth,” he said during a conference call.

Canadian housing starts contracted eight per cent in the quarter, including a 17 per cent reduction in Western Canada as Alberta starts fell 25 per cent, though British Columbia was up 11.8 per cent. Quebec decreased 15.1 per cent and Atlantic Canada fell 29.5 per cent while Ontario grew 9.6 per cent.

Led by Ontario, Canadian home resales grew 7.6 per cent.

Sawyer said Quebec’s economy continues to be weak and, after a strong spring, sales have begun to wane in Alberta — a smaller market for Rona than Quebec and Ontario.

“We are getting into turbulence in Alberta especially. Going forward, it will be less same store sales positive than we used to experience over the last quarter,” he told analysts.

He said the weaker Canadian dollar will also likely force the company to increase prices.

Rona’s revenues in the second quarter were the highest since the same period in 2012. Almost $97 million in adjusted pre-tax operating profits (earnings before interest, taxes, depreciation and amortization) were the highest since the third quarter of 2011.

Rona and its nearly 24,000 employees operate a network of more than 500 corporate, franchise and independent affiliate stores across Canada.

On the Toronto Stock Exchange, Rona’s shares closed up nine cents at $15.09.

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