Home Depot profit beats but sales miss estimates

NEW YORK (Reuters) - Home Depot Inc reported a slightly higher-than-expected quarterly profit on tighter cost controls, but sales missed Wall Street estimates as consumers curbed spending in the grim U.S. economy.

The mixed results prompted the top home-improvement chain to boost its profit outlook and shave its sales forecast for the year. The company's shares rose about 1 percent in premarket trading.

The news came the day after rival Lowe's Cos posted weaker-than-expected quarterly results, but kept its forecast for same-store sales growth this year in hopes of benefiting once demand picks up.

Like many other retailers, Home Depot has tightly managed costs to offset tepid sales. It has benefited from a slower expansion strategy, recent measures to improve its supply chain and cost cuts that included workforce reductions in January.

Net income rose to $1.2 billion, or 72 cents a share, in the second quarter ended August 1 from $1.1 billion, or 66 cents a share, a year earlier.

Analysts on average were expecting 71 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 1.8 percent to $19.41 billion, missing the average estimate of $19.59 billion.

Sales at stores open at least a year rose 1.7 percent globally. UBS analyst William Truelove had expected an increase of 3.5 percent, while Wall Street on average had forecast growth of 2.3 percent, according to an early note.

Same-stores sales rose 1 percent in the United States, the company's main market. Lowe's, which has few stores outside the United States, had posted a 1.6 percent increase for its latest quarter.

For the year, Home Depot sees earnings of $1.90 a share from continuing operations, up 2 cents from its prior outlook. However, it expects sales growth of about 2.6 percent, down from a prior view of 3.5 percent.

Shares of Home Depot were up 1.1 percent at $27.68 in trading before the market opened.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn)