Lowe's Beats on Earnings and Revenue

Lowe's shares ( LOW ) rose in pre-market trading after the retailer reported first-quarter earnings that beat analysts' estimates, despite declining from the year-ago period amid a pullback in home-improvement spending. The company said growth in digital sales and market share among professional contractors helped partially offset a continued slowdown in sales of big-ticket items. Lowe's ( LOW ) affirmed its full-year guidance, projecting revenue and diluted earnings per share (EPS) roughly in line with analyst estimates.

Sales have fallen in recent quarters for Lowe's and rival Home Depot ( HD ) amid a slowdown in spending on do-it-yourself (DIY) projects and big-ticket items as inflation weighs on many consumers. The company said growth in its digital sales and market share among professional contractors, an area in which Home Depot is also looking to expand, helped partially offset the continued decline in DIY big-ticket spending.

In Tuesday's earnings report, Lowe's affirmed its outlook for the full fiscal year, projecting comparable store sales to decline by 2% to 3% for the year. The company said it anticipates revenue to come in from $84 billion to $85 billion, in line with the $84.25 billion analysts projected, and a decrease from the $86.38 billion in revenue that Lowe's generated in fiscal 2032.

Lowe's said it expects diluted earnings per share (EPS) within a range of $12 to $12.30, with analysts expecting around $12.18, down from last year's $13.20. Shares were up 3% at $236 as of 8:20 a.m. ET Tuesday following the release.

In the three-month period that ended May 3, Lowe's net income fell to $1.76 billion, or $3.06 per share, compared with $2.26 billion, or $3.77 per share, a year earlier. Sales dropped from $22.35 billion in the year-ago period, marking the fifth quarter in a row that Lowe's posted a year-over-year sales decline. Compared with Home Depot, Lowe's draws less of its business from painters, contractors, and other home professionals who tend to provide steadier business even when do-it-yourself customers pull back.

Lowe's is lapping a year-ago quarter when the company slashed its full-year outlook and posted a year-over-year sales decline. As of Monday's close, the company's stock is up nearly 3% this year, trailing the 11% gains of the S&P 500.