Sales drop during first quarter but improvement seen in May by chain.
Lowe’s Companies said a severe winter that included an additional period of cold and snow weighed on company sales during its fiscal first quarter. However, profit at the do-it-yourself home improvement chain increased.
Shares for the chain of home-improvement stores were up 1% during early Wednesday trading as earnings exceeded analyst’s estimates. The retailer has pointed to better sales for May.
Many observers were expecting sales of home improvement retailers to be negatively impacted because of the more severe winter that was combined with temperatures lower than normal that lingered over much of the U.S.
Home Depot on Tuesday also experienced a weak start to the spring season in sales.
Meanwhile, Lowe’s posted sales growth in same-stores of 0.9% through May 2. Even though there is relatively tame growth, Robert Niblock, the CEO and chairman of Lowe’s reaffirmed the sales guidance for the company for this year, noting an improved performance for May.
The company said Niblock performed well this past quarter despite the weather.
While the severely poor weather caused less traffic in stores and impacted negatively the performance of categories for the outdoors, results for the categories pertaining to the indoors were strong.
Overall, the company posted $624 million in earnings equivalent to 61 cents per share, which was up from last year during the same period of $540 million equivalent to just 49 cents per share.
Net sales were up by 2.4% to end the quarter at $13.4 billion.
Analysts had been expecting earnings to be 60 cents per share on revenues of more than $13.86 billion.
Gross margin broadened from last month’s 34.8% to 35.5% as costs of input increased by 1.3% to end the quarter at $8.65 billion.
