Canadian home improvement retailer Rona Inc. has announced the results for its continuing operations for the third quarter ended September 29, 2013. Rona reported revenues from continuing operations of $1,169.2 million in the third quarter of 2013, down $52.5 million, or 4.3%, from $1,221.7 million in 2012. All figures are in Canadian dollars.
The revenue decrease stems mainly from $18.2 million in lost sales due to store closures over the last 12 months and a 2.4% decrease in same-store sales. The decrease was partially offset by new store openings, which added $3.5 million to the quarter’s consolidated revenues. Same-store sales were affected by a sharp drop in single-family housing starts in Canada, in particular in Quebec, where it declined by 31% during the quarter. Rona noted that it earns close to 50% of its revenues in Quebec.
Adjusted EBITDA from continuing operations stood at $70.7 million in the third quarter of 2013, down $5 million from $75.7 million in 2012. Adjusted net income from continuing operations was $30 million, compared to $33.5 million in 2012.
Rona noted that its continuing recovery plan is easing pressure on results and strengthening its financial position, reporting that it continued to generate annualized cost savings that are on track to achieve the recovery objective of $110 million as announced in June. In the third quarter of 2013, annualized cost savings amounted to $63 million, increasing from $17 million in the first quarter to $30 million in the second. The cost savings are mainly related to workforce reductions, the renegotiation of major administrative services contracts and the closure of underperforming stores.
“The $63 million in annualized cost-savings achieved year-to-date has allowed us to quickly roll out measures that will have an ongoing impact on Rona’s financial performance. I am especially proud of the fact that we have reduced our inventory by a total of $114 million,” said Robert Sawyer, president and CEO of Rona.
In October, Rona completed the sale of its Commercial and Professional Market division, resulting in cash proceeds of $214 million. Rona, a Canadian distributor and a retailer of hardware, home renovation and gardening products, operates a network of over 530 corporate, franchise and affiliate retail stores of various sizes and formats under different banners, and a network of 13 distribution centers.