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

Shares of Lowe's slid Wednesday after the company lowered its earnings outlook, citingits acquisition of Canada's Ronahardware store chain.

"The only changes to our outlook are related to Rona," Lowe'schief financial officer Bob Hull told analysts duringa conferencecall. The U.S.-based retailer bought Quebec-basedRona for $3.2 billion earlier this year.

Shares in Lowe's closed down $4.60US, or almost six per cent, to finish at $76.88US 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 expectingits 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 Ronachain, and the U.S. firm said it is aiming to double profitability at Ronawithin 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$1.31from$1.20in 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 billionin the second quarter of 2015. Comparable sales at store locations open more than 12 months increased by two per cent year-over-year.