Rona had $38 million in net income, or $38.5 million after adjustments, in the third quarter.
Those were both up from $30 million a year earlier, but slightly below analyst estimates.
The adjusted profit was 33 cents per participating share, a penny below analyst estimates of 34 cents per share, while net income was 32 cents per share.
Revenue for the national home-improvement chain was $1.167 billion, mostly stable compared with $1.169 billion a year before, despite the closure of underperforming stores..
Same-store sales at locations open at least a year rose 2% in Rona’s retail segment and 8.3% in its distribution segment.
When the quarter ended on Sept. 28, Rona’s net debt had fallen to $188.4 million, down from $347.8 million a year earlier, but up from $185.6 million at the end of the second quarter.
“The third quarter results demonstrate the positive impact of having our teams focused on optimizing store operations,” said Robert Sawyer, Rona’s president and chief executive officer.
“Given the positive trend in sales and profitability, and Rona’s solid financial situation, we are in a position to start expanding again. In 2015, we will open five new stores, including two stores under the new Reno-Depot concept outside Quebec.”
Rona is also renewing its share buyback program. It spent $77.4 million to purchase nearly 6.1 million shares in its previous normal course issuers bid, paying a volume weighted price of $12.69 per hare. The new buyback program, starting Nov. 18, will give Rona permission — but not an obligation — to repurchase up 9.2 million common shares.
The company’s shares opened at $13.64 on the Toronto Stock Exchange, shortly after the earnings report.
“Counting on cash available and free cash flow generation, we believe the purchase of our common shares would represent an effective use of our capital,” said Rona chief financial officer Dominique Boies.
“This buyback program is part of our initiatives intended to optimize our capital structure and increase shareholder value.”
