Canadian home improvement retailer RONA posted record second-quarter net earnings of C$86.2 million (US$82.1 million), up 7.7 percent from C$80 million (US$76.2 million) last year.
Sales rose 9.1 percent, to C$1.47 billion (US$1.4 billion) from C$1.35 billion (US$1.29 billion) last year. Same-store sales increased 0.2 percent at the retailer. The company also recorded a gain of C$2.4 million (US$2.29 million) related to the application of a new accounting standard for financial instruments.
In a sales environment that was “more difficult than anticipated,” RONA had attributed the sales and income increases to acquisitions it has made in the last year and “additional measures taken at the beginning of the quarter to stimulate sales and earnings growth."
Those acquisitions included Noble Trade, Curtis Lumber and Mountain Building Centres. Additionally, the company said it has “15 acquisition opportunities under study and a very proactive recruiting approach.”
Among added initiatives in the second quarter, the retailer launched the “AirMiles” loyalty program in its network of Reno-Depot stores. The company also made “major efforts” in the area of promotional activities.
The company was optimistic about future financial conditions in Canada, noting that housings starts remain at “historically high levels” and home prices have “risen more than 10 percent since the beginning of the year.”
“A number of economists believe that the Canadian economy will grow faster than the American economy in 2007 and 2008, as long as economic activities related to natural resources remain strong and there is no major slowdown in housing construction and resales,” the company said.
RONA operates a network of 671 franchise, affiliate and corporate stores of various sizes and formats.