By Michael Calia
Lowe's Cos. on Wednesday raised its outlook after its sales and
profit grew in the most recent period as the company maintained its
cautious optimism about the home-improvement sector.
Shares of the company rose about 5% in recent premarket trading
as the results exceeded analysts' expectations.
The company expanded its expectations for full-year sales growth
to 4.5% to 5%, up from a projection of 4.5%. It also sees
same-store sales expanding 3.5% to 4%, compared with its previous
guidance of 3.5%. Lowe's had previously lowered its guidance in
August.
The company also increased its earnings forecast for the year
ending Jan. 30 by five cents a share to $2.68.
Lowe's posted its results for the most recent period a day after
bigger rival Home Depot Inc. reported sales that exceeded
expectations and reiterated its confidence in a slow-but-steady
U.S. housing recovery.
Lowe's also sees encouraging signs in the housing, pegging
consumer confidence in the market at prerecession highs. Chief
Executive Robert A. Niblock said during a conference call Wednesday
that customers--buoyed by lower fuel prices and interest rates, as
well as home-value appreciation--are looking to invest in their
homes more now than at any point since 2006.
"We are pleased with our performance, and continue to be
cautiously optimistic about the home improvement landscape," Mr.
Niblock said in a news release.
Lowe's said same-store sales rose 5.1% in the period, compared
with Home Depot's 5.2% increase.
Mr. Niblock said during the call that average ticket rose 3.4%,
while transactions grew 1.7%. He added that the company has
experienced an "encouraging" rise in big-ticket purchase, although
most home-improvement purchases have been smaller.
For the quarter ended Oct. 31, Lowe's posted earnings of $585
million, or 59 cents a share, up from $499 million, or 47 cents a
share, a year earlier.
Net sales rose 5.6% to $13.68 billion.
Analysts had projected 58 cents a share in earnings and $13.55
billion in revenue.
Write to Michael Calia at michael.calia@wsj.com
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