Lowe's shares rose as much as 7 percent in premarket trading on Wednesday. (Click here for the latest quote.)
The company said its net sales rose 5.6 percent to $11.66 billion in the fourth-quarter ended January 31. Analysts on average were expecting sales of $11.67 billion, according to Thomson Reuters I/B/E/S.
Lowe's posted a 3.9 percent rise in comparable store sales.
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Home Depot reported a 3 percent decline in overall sales on Tuesday, which some analysts viewed as an indication that the recent U.S. housing recovery was losing momentum.
Lowe's said it expects 2014 total sales to rise by about 5 percent. That translates to about $56.07 billion.
The company also forecast earnings of about $2.60 per share for the year ending January 30, 2015.
Analysts on average were expecting a profit of $2.64 per share on sales of $56.25 billion.
Lowe's net income rose to $306 million, or 29 cents per share, in the fourth quarter from $288 million, or 26 cents per share, a year earlier. Analysts on average were expecting a profit of 31 cents per share.
(Read more: Eh, don't put too much stock in retail earnings)
The Mooresville, N.C.-based company also said its board has authorized an additional $5 billion share repurchase program.
Lowe's shares have risen about 25 percent to Tuesday's close of $48.11 on the New York Stock Exchange. They trade at 18.03 times forward earnings, while Home Depot shares trade at 17.54 times. (Click here for the latest Home Depot quote.)