Lowe’s Cos., the second-largest U.S. home-improvement retailer, reported first-quarter profit that exceeded analysts’ estimates after warm weather spurred sales of outdoor items, though cut its forecast for the year.
Net income rose 14 percent to $527 million in the quarter ended May 4 from $461 million a year earlier, the Mooresville, North Carolina-based company said in a statement. Excluding some items, per-share earnings advanced to 44 cents, compared with the average estimate of 42 cents.
Lowe’s boosted sales at stores open at least a year by 2.6 percent, spurred by demand for flowers and garden supplies. Chief Executive Officer Robert Niblock equipped employees with iPhones last year to improve service while eliminating slow-selling items after growth trailed larger Home Depot Inc.
“Weather aided first-quarter sales,” Scot Ciccarelli, an analyst at RBC Capital Markets in New York, wrote in a note to investors May 10. He rates Lowe’s as outperform, which equates to a buy recommendation, and said it “is closely following Home Depot’s playbook and taking the necessary steps to catch up on infrastructure and technology investments.”
Home Depot, based in Atlanta, last week reported same-store sales increased 5.8 percent while revenue rose 5.9 percent to $17.8 billion.
Lowe’s reduced its forecast for full-year earnings to a range of $1.73 to $1.83 from $1.75 to $1.85 because of a smaller increase in profit margins than it had previously expected. Earnings before interest and tax as a percentage of sales will rise by 0.9 percent point, the retailer said, compared with its previous forecast for a 1 percentage point expansion.
Lowe’s rose 0.4 percent to $28.48 on May 18 in New York. The shares had advanced 12 percent this year before today.
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