By Michael Calia
Lowe's Companies Inc. said an extended period of wintry weather
weighed on sales in the fiscal first quarter, although its profit
still rose.
Shares of the home-improvement chain gained 1% in early trading
as earnings topped analysts' expectations and the retailer pointed
to improved sales in May. Lowe's, citing a lower tax rate, also
boosted its full-year earnings outlook to $2.63 a share from its
February guidance of $2.60, which was below consensus at the
time.
Worse-than-usual winter weather, combined with
lower-than-average temperatures lingering over much of the U.S.,
led many observers to expect a negative impact on home improvement
retailers' sales in the most recent period. On Tuesday, Lowe's
rival Home Depot Inc. posted results that fell below
expectations--along with 2.6% in same-store sales growth--because
of a weak start to the spring selling season.
Lowe's, meanwhile, posted same-store sales growth of 0.9% for
the period ended May 2. Despite the tame growth, Lowe's Chairman
and Chief Executive Robert A. Niblock reaffirmed the company's
sales guidance for the year, noting that its performance improved
in May.
"We executed well during the quarter, despite an unexpectedly
prolonged winter in many areas of the country," he said in the
company's earnings release. "While poor weather dampened traffic
and negatively impacted performance of exterior categories, results
for indoor categories were solid."
Overall, Lowe's posted earnings of $624 million, or 61 cents a
share, up from $540 million, or 49 cents a share, a year
earlier.
Net sales rose 2.4% to $13.4 billion.
Analysts surveyed by Thomson Reuters had expected 60 cents a
share in earnings and $13.86 billion in revenue.
Gross margin widened to 35.5% from 34.8% as input costs rose
1.3% to $8.65 billion.
Write to Michael Calia at michael.calia@wsj.com
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