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Lowe's (NYSE:LOW) shares rose 2.6% in premarket trading Tuesday after the home improvement retailer reported stronger-than-expected earnings for the first quarter and stuck with its full-year forecast, echoing a similar move by rival Home Depot (NYSE:HD).
Comparable sales for the quarter fell 1.7%, but that was better than the expected 2% drop. The company said early-quarter weather challenges were partly balanced by solid gains in professional customer and online sales. Gross margin improved slightly to 33.4% of sales, up from 33.2% last year.
Earnings per share came in at $2.92, beating Wall Street's $2.87 estimate, though down from $3.06 a year ago. Operating income stood at 11.9% of sales versus 12.4% in the prior year.
Lowe's expects full-year revenue between $83.5 billion and $84.5 billion, with comparable sales ranging from flat to up 1%. Adjusted earnings per share are forecasted at $12.15 to $12.40, with a midpoint slightly above analyst expectations.
The company returned $645 million to shareholders through dividends during the quarter ended May 2. Home Depot (NYSE:HD) was also trading slightly higher in early action.
This article first appeared on GuruFocus.