NORTH WILKESBORO (dpa-AFX) - Lowe's Cos., Inc. (LOW) reported Wednesday higher profit in its first quarter, benefited by growth in net sales and comparable store sales. Further, the home improvement retailer lifted its fiscal 2014 earnings view, and backed sales and comparable sales growth forecast.
In pre-market activity, Lowe's shares are gaining $2.48 or 5.45 percent, and trading at $48.
Chairman, President and CEO Robert Niblock said, 'Performance has improved in May which, together with our strengthening execution, gives us the confidence to reaffirm our sales and operating profit outlook for the year.'
The Mooresville, North California-based company's first-quarter net earnings were $624 million, 15.6 percent higher than last year's $540 million. Earnings per share climbed 24.5 percent to $0.61 from $0.49 a year ago.
The latest results included charges related to long-lived asset impairments that reduced pre-tax earnings by $23 million or $0.01 per share. The results also included the impact of a lower tax rate, primarily the result of a settlement of prior year tax matters, which contributed $0.04 to earnings per share.
On average, 27 analysts polled by Thomson Reuters expected earnings of $0.60 per share for the quarter. Analysts' estimates typically exclude one-time items.
The company's total quarterly net sales grew 2.4 percent to $13.40 billion from the prior-year figure of $13.09 billion, whereas 23 analysts estimated sales of $13.86 billion.
For the quarter, comparable sales edged up 0.9 percent. Gross margin improved to 35.5 percent from 34.8 percent a year ago.
Niblock said, 'We executed well during the quarter, despite an unexpectedly prolonged winter in many areas of the country. While poor weather dampened traffic and negatively impacted performance of exterior categories, results for indoor categories were solid.'
As of May 2, Lowe's operated 1,836 home improvement and hardware stores in the United States, Canada and Mexico.
Looking ahead for fiscal 2014, Lowe's now projects earnings per share around $2.63, higher than previous estimate of about $2.60. Analysts project earnings per share of $2.62 for the year.
The company attributed the revision to lower tax rate, primarily the result of a settlement of prior year tax matters, offset by charges related to long-lived asset impairments in the first quarter.
Further, Lowe's continues to expect sales to increase by approximately 5 percent, comparable sales to increase approximately 4 percent, and operating margin to grow about 65 basis points.
Street is currently looking for full-year 2014 annual revenue growth of 5 percent to $56.06 billion.
The company also plans to open approximately 10 home improvement and 5 hardware stores in the year.
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