Rona Inc. has announced the results for its first quarter ended March 30, 2014. Consolidated revenues for continuing operations amounted to $764.3 million, down 8.2% from $832.9 million for the first quarter of 2013. All figures are in Canadian dollars.
The decrease primarily reflects the closure of underperforming stores, harsher weather conditions that had a negative impact on stores that sell building materials in Quebec and Ontario, and more difficult conditions in the industry as a whole stemming mainly from a decline in housing starts across the country. Sales were also affected by major renovations at its Réno-Dépôt stores. These factors contributed to a 4% decrease in same-store sales in the first quarter of 2014, according to the company.
“We are encouraged by the initial change in the trend of sales observed in the newly renovated Réno-Dépôt stores. Given these positive indicators, we have accelerated the repositioning of this banner. To date, 11 stores have been fully renovated under the new concept and we expect to complete all 16 Réno-Dépôt stores by the end of the second quarter of 2014,” said Robert Sawyer, president and CEO of Rona.
Adjusted EBITDA for continuing operations totaled $10 million, or 1.3% of revenues, compared to $1.6 million, or 0.2% of revenues in the first quarter of 2013. The increase reflects the cost-savings of $23.7 million achieved by the retailer’s recovery plan, which lowered selling, general and administrative expenses, and the positive impact of closing the underperforming stores. Rona used part of these cost-savings to stimulate sales through marketing initiatives and the repositioning of the Réno-Dépôt banner. The adjusted net loss from continuing operations in the first quarter of 2014 was $14.4 million, compared to $18.3 million in the first quarter of 2013.
Rona operates a network of over 500 corporate, franchise and affiliate stores under several different banners, along with eight distribution centers.