Rona said the results demonstrate the success of its turnaround plan and its need to stay focused on efficiency. The Boucherville, Quebec-based company reduced annual costs by C$110 million ($100.5 million) in 2013 by cutting jobs, closing stores and selling assets.

Still, arduous competition and a slowdown in some markets, notably in the province of Quebec, squeezed sales in the 13-week period ended July 29. Sales at established stores declined 0.7 percent from a year earlier and overall revenue fell 4 percent.

"In our view, the home renovation spending market remains highly competitive, which coupled with a cautious consumer spending market, is likely to challenge Rona's top line over the coming quarters," Canaccord Genuity analyst Derek Dley said in a research note.

Rona's closely watched adjusted earnings from continuing operations rose to C$42 million, or 35 Canadian cents a share, in the second quarter, from C$33.6 million, or 28 Canadian cents a share, in the year-before quarter.

Analysts, on average, had expected earnings per share of 33 Canadian cents, according to Thomson Reuters I/B/E/S.

Net profit of C$42 million reversed last year's loss of C$38.7 million.

Revenue fell to C$1.19 billion from C$1.25 billion.

A weak market and harsh winter hurt first-quarter results, the company said in May, blaming a 4 percent drop in same-store sales on lower housing starts, cold and snowy weather, along with the closure of poorly performing stores and the renovation of other stores.

($1=$1.09 Canadian)

(Reporting by Susan Taylor; Editing by Peter Galloway)