Lowe's May sales improve, severe winter hits first-quarter results

(Reuters) - Lowe's Cos Inc , the world's No.2 home improvement chain, said its sales picked up in May, after a severe winter in the United States hurt results in the first quarter.

The company also maintained its sales growth forecast of 5 percent for the year ending January 30.

Bigger rival Home Depot Inc said on Tuesday that its sales in May were "robust" and that it expected to realize in the current quarter most of the sales lost in the first quarter due to the bad weather.

"Similar to Home Depot ... Lowe's guidance implies the difficult winter weather in (the first quarter) delayed spring seasonal sales rather than eliminated them," Canaccord Genuity analyst Laura Champine wrote in a note.

Lowe's sales increased 2.4 percent in the first quarter ended May 2, as strong demand for indoor products more than offset the impact of weakness in outdoor categories.

Spring is an important season for home improvement retailers as building repairs and renovations pick up and households prepare their gardens.

However, Lowe's comparable store sales growth continued to lag that of Home Depot. The world's biggest home improvement chain is benefiting from improved merchandising, strong relationships with contractor clients and better store-level execution, Champine said.

Home Depot, which gets most of its business from building contractors, posted a 2.6 percent rise in comparable store sales, while Lowe's posted a 0.9 percent increase.

Analysts polled by Consensus Metrix had expected Lowe's comparable store sales to rise by 5 percent.

Lowe's raised its full-year earnings forecast to $2.63 per share from $2.60 per share due to a lower tax rate.

Analysts on average were expecting $2.61 per share, according to Thomson Reuters I/B/E/S.

Lowe's revenue rose to $13.40 billion in the first quarter, but came below the average analyst estimate of $13.86 billion.

Lowe's said its net income rose to $624 million, or 61 cents per share, from $540 million, or 49 cents per share.

Excluding one-time items, the company earned 58 cents per share. Analysts had expected a profit of 60 cents per share.

Lowe's shares were little changed in premarket trading on Wednesday.

The stock, which closed at $45.52 on the New York Stock Exchange on Tuesday, has fallen about 8 percent this year so far.

(Editing by Kirti Pandey)

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