Rona acquisition will reduce full-year earnings, Lowe's says

Shares of Lowe's slid Wednesday after the company lowered its earnings outlook, citing its acquisition of Canada's Rona hardware store chain.​

"The only changes to our outlook are related to Rona," Lowe's chief financial officer Bob Hull told analysts during a conference call. The U.S.-based retailer bought Quebec-based Rona for $3.2 billion earlier this year. 

Shares in Lowe's closed down $4.60 US, or almost six per cent, to finish at $76.88 US on the New York Stock Exchange. 

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Lowe's said it now expects full-year diluted earnings per share of approximately $4.06 US, including the effect of its takeover of Rona. 

Back in May, the month it completed the Rona takeover, Lowe's said it was expecting its full-year diluted earnings to come in at $4.11 per share.

However, Lowe's said it now expects sales growth of 10 per cent this year, up from the six per cent growth figure it projected in May.

Lowe's CEO Robert Niblock said he was pleased with the progress of integrating the Rona chain, and the U.S. firm said it is aiming to double profitability at Rona within five years.

Lowe's said it made $1.2 billion US in the second quarter, a 3.7 per cent increase over the same period a year ago. Diluted earnings per share increased 9.2 per cent to $1.31 from $1.20 in the second quarter of 2015.

Lowe's said its sales for the quarter rose by 5.3 per cent to $18.3 billion US from $17.3 billion in the second quarter of 2015. Comparable sales at store locations open more than 12 months increased by two per cent year-over-year.