Rona adjusted earnings rise, net income reduced by purchase of franchise stores

BOUCHERVILLE, Que. – The Rona home-improvement retail chain says efforts to fix up its business are showing results.

The Quebec-based company says its adjusted net income for the third quarter rose to $42.9 million or 40 cents per share, up 11.5 per cent compared with $38.5 million or 33 cents per share during the comparable period last year.

However, a one-time expense related to Rona’s acquisition of its 20 franchised stores pushed down net income to $8.6 million from $41.5 million in last year’s third quarter.

Rona’s purchase of the franchise locations also reduced distribution sales and was the main reason for a decline in third-quarter revenue to $1.16 billion from $1.17 billion.

Same-store sales at locations open at least a year rose for a fifth consecutive quarter, up 1.1 per cent from a year ago.

Dominique Boies, Rona’s chief financial officer, said the company is getting a sustained improvement in its earnings from sales growth and growth in sales of higher-margin merchandise.