CHICAGO — Lowe's Cos. Inc. said shoppers buying paints, plants and replacement parts in the first quarter helped the home-improvement chain beat Wall Street forecasts and prompted it to boost its full-year outlook.
The company said business was "less bad" in all regions of the country and that economic conditions might — slowly — be improving.
"In recent weeks, we have seen consumer confidence improve, housing turnover show signs of a bottom in certain markets, and home prices slow their decline," chairman and chief executive Robert Niblock said in a statement.
Lowe's, like much of the rest of the housing and home-improvement industry, has been battered by falling home prices, rising foreclosures and unemployment rates, and worsening consumer confidence.
Lowe's results helped buoy the broader market and raised expectations for rival The Home Depot Inc., set to report first-quarter results early Tuesday.
Niblock said sales in the hardest-hit states — among them California, Nevada and Florida — were still faring poorly but were beginning to show signs of improvement as more foreclosed properties are bought. Areas of the Ohio Valley and Texas continued to show sales growth.
"It's moving in the right direction," he said during an interview.
For the three months that ended May 1, Lowe's said it earned $476 million, or 32 cents a share. That's down nearly 22 percent from the previous year's profit of $607 million, or 41 cents a share, but well ahead of forecasts.
Sales dipped 2 percent, to $11.83 billion from $12.01 billion.
Analysts surveyed by Thomson Reuters expected the retailer to earn 25 cents a share on revenue of $11.63 billion.
Unlike the fourth quarter, Lowe's was able to avoid marking down as many items.
The nation's second-biggest home-improvement chain said consumers continued to stay away from bigger-ticket housing items as they tried to shore up their savings amid the recession. But shoppers did welcome spring with smaller, outdoor purchases and bought supplies for easy do-it-yourself projects such as painting.
The volume of shoppers who spent about $50 during a visit to the retailer at stores open at least a year held steady, while the number of shoppers who spent more than $500 fell 14 percent.
For the full year, Lowe's forecast earnings of $1.13 to $1.15 a share. The retailer's second-quarter guidance anticipates profit of 51 cents to 55 cents a share.
Lowe's expects a sales decline of 2 percent to an increase of 1 percent for both the full year and the second quarter.