Mooresville, N.C. — Lowe’s saw sales and profit rise in the first quarter as the housing market began to thaw, but the performance was far from what Wall Street had expected and shares tumbled 7 percent before the opening bell Wednesday.
The performance was a stark contrast to the performance of its rival, Home Depot Inc., with beat almost all projections Tuesday and raised its outlook for the year.
Investor hopes may have been buoyed even further this week after the U.S. released housing data that appeared to reveal a housing market on the cusp of a boom. According to the Commerce Department, housing starts last month increased to a pace that has not been seen since the start of the recession.
Yet that growth did not lift sales as much as hoped at Lowe’s Cos.
For the three months ended May 1, Lowe’s earned $673 million, or 70 cents per share. While better than the $624 million, or 61 cents per share, a year earlier, it was far from the per-share earnings of 74 cents that industry analysts were projecting.
Revenue for the Mooreseville, North Carolina, company climbed to $14.13 billion from $13.4 billion. That also fell short of the $14.23 billion that Wall Street had expected.
Sales at stores open at least a year rose 5.2 percent, a figure that was easily outpaced by Home Depot and also below most expectations for Lowe’s.
Lowe’s maintained its projections for earnings of about $3.29 per share for the year, with sales rising 4.5 percent to 5 percent. Analysts polled by FactSet predict full-year earnings of $3.32 per share.
The chain had 1,843 home improvement and hardware stores in the United States, Canada and Mexico at the quarter’s end.
Shares fell $5.13to $66.70 before the market opened.
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