Lowe's missed Wall Street forecasts for quarterly sales on Wednesday as a long winter hit demand for outdoor products, but the home improvement retailer maintained its annual financial targets on expectations that demand will recover.
Many U.S. retailers have said that a late start to the spring selling season has weighed on sales of lawn-mowers, patio furniture, and other seasonal products during the February-April period.
Still, Lowe's Chief Executive Officer Robert Niblock said in a statement he was "encouraged by strong sales in the month of May."
Shares of Lowe's, the No. 2 U.S. home improvement chain, rose 3 percent to $88.30 in premarket trading, despite the company's lower-than-expected comparable-store sales for the first quarter.
Sales at Lowe's stores open at least a year rose 0.6 percent in the three months ended May 4, while analysts on average had expected a 3.06 percent increase, according to Thomson Reuters I/B/E/S.
"While certainly a touch disappointing, (Lowe's report) wasn't a big surprise to us. We believe most of the (comparable-store sales) pressure to be more transitory in nature than structural," Gordon Haskett analyst Chuck Grom said.
Like Lowe's, its bigger peer Home Depot last week blamed cold weather for missing Wall Street estimates on same-store sales for the first time in seven quarters.
Lowe's maintained its annual forecast for profit and same-store sales, while slightly raising its estimate for sales growth to reflect an accounting change.
The company's net income rose to $988 million or $1.19 per share in the first quarter, while sales rose nearly 3 percent to $17.36 billion. Analysts had expected earnings of $1.22 per share and revenue of $17.46 billion.
On Tuesday, Mooresville-North Carolina-based Lowe's said current J.C. Penney CEO Marvin Ellison would be taking over at Lowe's, replacing Niblock, who held the position for 13 years.