Mooresville, N.C. — No. 2 majap retailer Lowe’s reported a 15.6 percent spike in first-quarter profits on strength in indoor categories.
The home-improvement chain posted net earnings of $624 million and net sales of $13.4 billion, up 2.4 percent, for the three months, ended May 2. Comp sales increased 0.9 percent.
“We executed well during the quarter, despite an unexpectedly prolonged winter in many areas of the country,” said chairman/president/CEO Robert Niblock. “While poor weather dampened traffic and negatively impacted performance of exterior categories, results for indoor categories were solid. We effectively aligned inventory, staffing and marketing resources by climatic zone to best serve customers’ needs.”
Niblock added that performance has improved in May, which supports prior full-year projections of a 5 percent increase in sales and a 4 percent gain in comps.
The company currently operates 1,836 locations and plans to open 10 home-improvement centers and five hardware stores this year.
In a research note, Credit Suisse retail analyst Gary Balter observed that Lowe’s comp sales trailed those of The Home Depot, which reported its first-quarter results yesterday. But like its chief rival, “margins were the standout positive of this quarter,” he said, with gross margins rising 70 basis points year over year, representing the biggest boost for Lowe’s since the third quarter of 2010.
