Lowe's Cos. reported a strong earnings beat in the latest quarter and lifted its guidance for the year as the home-improvement retailer logged impressive growth in comparable sales.

For 2016, the company now expects earnings of about $4.11 a share, up from previous guidance for $4 a share. Lowe's backed its guidance for comparable-store sales to rise 4%.

Lowe's results come on the heels of a strong report from bigger rival Home Depot this week. The home-improvement retailers have enjoyed rising sales while companies in other corners of the retail sector struggle. Though Americans have curbed spending on things like apparel, they have been willing to shell out for refurbishing their dwellings amid favorable housing trends.

Home prices are rising, giving owners more confidence to spend on larger projects. More people are moving and starting new homes, and America's old housing stock means plenty of opportunities for other improvement projects.

In the latest quarter, Lowe's said "project expertise and commitment to customer service allowed us to capitalize on strong home-improvement demand during the quarter."

"We executed well in the quarter, growing both transaction and average ticket to achieve comparable sales growth that exceeded our expectations," said Chief Executive Robert Niblock

Sales at stores open at least a year climbed 7.3%. And U.S. same-store sales at Lowe's rose 7.5%, edging out Home Depot—whose U.S. same-store sales grew 7.4% in the quarter—for the first time in a decade.

In all, Lowe's posted a profit of $884 million, or 98 cents a share, up from $673 million, or 70 cents, a year earlier. The quarter's results were padded by $160 million, or 11 cents a share, due to an unrealized gain on a foreign-currency hedge entered into in advance of the company's pending acquisition of Canadian home-improvement chain Rona Inc.

Revenue rose 7.8% to $15.2 billion. Analysts polled by Thomson Reuters had projected 85 cents a share in adjusted earnings on $14.87 billion in revenue.

Lowe's shares, inactive premarket, have added 12% over the last three months to $76.07.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

May 18, 2016 07:05 ET (11:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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