Quebec-based RONA, distributor and retailer of hardware, renovation and gardening products, reported a 3.8% increase in sales to $911.5 million in the first quarter 2008. Same-store sales declined by 5.2% in the first quarter of 2008.
Profit was $1 million, compared with $9 million in the year-ago period.
RONA said that economic and weather conditions that were especially unfavorable to construction/renovation activities, particularly in Eastern Canada, largely explain this drop in same-store sales and profits. Results were also affected by a decline in starts of single family homes in Canada and a temporary slowdown in the demand for building materials in Alberta.
The results for first quarter 2008 reflect the strong drop in consumer confidence in the country's economic growth. Results were also affected by weather conditions that were particularly unfavorable to construction and renovation activity in Ontario and Quebec, where we get nearly 70% of our sales," said RONA President and CEO Robert Dutton. "Because of the significant seasonality of our activities, only 15% of our annual sales and 5% of our earnings are on average generated in the first quarter of the year. So we have very little room to maneuver at the beginning of the year to compensate for these difficult market conditions."