Home improvement retailer Rona Inc. reported net income of $50.1-million in the third quarter, a period the home improvement retailer said was marked by economic uncertainty and cautious spending by consumers.
“In circumstances in which significant economic uncertainty and volatility in financial markets continue to impact consumer confidence and purchase intentions, the results reported by Rona today demonstrate our considerable agility,” chief executive Robert Dutton said in a news release.
Net income was up from $48-million in the same quarter last year, the company said.
Revenues were $1.3-billion, up $27.9-million, the company said Wednesday.
Quebec-based Rona said earnings per share diluted were 36 cents, the same amount as in the third quarter of 2010.
Rona was expected to earn, on average, 34 cents per share in the third quarter on $1.35-billion in revenues, according to analysts polled by Thomson Reuters.
Rona said it had a 5.1-per-cent drop in same-store sales due to more cautious spending by consumers and a decline in residential housing starts.
“Given the fragile nature of Canadian consumer confidence and their cautious approach to major renovation projects, we expect to see continued downward pressure on same-store sales as a whole over the next few quarters,” Mr. Dutton said.
He said downward pressure on same-store sales would be particularly felt in major urban centres where growth in supply has exceeded demand, leading to sharper competition.
For its fourth quarter, Mr. Dutton said sales figures since the start of the quarter indicate that market conditions will remain difficult with the low level of consumer confidence still delaying major renovation projects.
The Canadian home renovations retailer continues to face a difficult operating environment caused by waning consumer confidence, decreased housing starts and reduced consumer spending.
Mr. Dutton has said the British Columbia market would remain challenging until the HST is repealed in 2013.
He has previously said Western Canadian sales are the biggest problem for the retailer even though sales in its key Quebec segment are slower than last year, while Ontario is doing “well” despite increased competition from U.S. rivals Lowe’s and Home Depot.
Rona has scaled back some of its expansion plans while attempting to withstand the dark clouds facing the home renovation industry by expanding its commercial segment through a string of acquisitions.
It is the largest Canadian retailer and distributor of hardware, home renovation and gardening products. Its 700 stores employ nearly 30,000 employees across the country.
Shares in Rona were down 11 cents at $9.45 in morning trading Wednesday.