Lowe's Misses on Top, Bottom Lines

By Chelsey Dulaney 

Lowe's Cos. reported weaker-than-expected profit and revenue growth in its first quarter, despite logging a 5.3% increase in a key sales metric for its U.S. home improvement stores.

Shares fell 6.6% in premarket trading.

In a weak retail environment, home improvement stores like Lowe's and peer Home Depot Inc. have been an outlier with consumers showing more of a willingness to spend money replacing windows and upgrading countertops than to splurge on fashion and everyday goods.

On Tuesday, peer Home Depot Inc. reported strong sales growth helped by healthy spending among wealthier Americans in an improving housing market.

Meanwhile, other retailers have shown weakness. Wal-Mart Stores Inc. on Tuesday reported a slim increase in U.S. sales and a drop in profit. Macy's Inc. and Kohl's Inc. have reported weak sales in the first months of the year.

For its part, Lowe's said its same-store sales at locations open at least a year rose 5.2% in the quarter ended May 1. Sales at U.S. Lowe's stores rose 5.3%.

Overall, Lowe's posted a profit of $673 million, or 70 cents a share, up from $624 million, or 61 cents a share, a year earlier.

Net sales grew 5.4% to $14.13 billion.

Analysts had expected earnings of 74 cents a share and revenue of $14.3 billion in revenue for the period, according to Thomson Reuters.

The company backed its full-year outlook.

Write to Chelsey Dulaney at [e-mail]

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