Mooresville, N.C. - Lowe's reported solid gains for its fiscal first quarter, ended May 4.
Net earnings rose 14.3 percent to $527 million, sales increased 7.9 percent to $13.2 billion, and comp-store sales edged up 2.6 percent year over year.
Gross margins slipped from 35.4 percent to 34.7 percent for the three-month period, possibly due to product mix shifts and a more disruptive than anticipated transition to everyday low pricing, Credit Suisse retail analyst Gary Balter suggested.
"We delivered solid results for the quarter, consistent with our expectation at the beginning of the year," observed Lowe's chairman, president and CEO Robert Niblock. He said the No. 2 home-improvement chain benefitted from the favorable weather, although demand for seasonal products slowed toward the end of the reporting period.
"We continue to maintain a cautious view of the housing and macro demand environment, and are focused on what we can control," Niblock added. "We are building on our core strengths and strategically investing in ways that will better position Lowe's for success."
Nevertheless, the company is projecting moderate full-year net sales gains of 3 percent, and comp-sale increases of 1 percent to 3 percent.
Lowe's operates 1,747 stores in the U.S., Canada and Mexico, representing 196.7 million square feet of retail selling space, and plans to open about 10 more stores this year.