MOORESVILLE, N.C. (AP) — Lowe's first-quarter net income rose almost 3 percent, even as a wet and cool spring dampened sales of gardening products.
But the home improvement chain's quarterly performance missed Wall Street's expectations. Its shares dropped more than 4 percent in premarket trading Wednesday.
Spring is the biggest season for home improvement retailers. While the weather was chilly in the quarter, the improving housing market has helped such businesses.
Home-improvement retailers such as Lowe's, which runs 1,755 stores in the U.S., Canada and Mexico, suffered as consumers spent less on their homes due to the prolonged housing slump and uncertain economy.
A slowly improving housing market is starting to help turn around results however. In addition, Lowe's Cos. has revamped its pricing structure, offering what it says are permanent low prices on many items across the store instead of fleeting discounts. It has also focused on hiring more workers and improving its inventory.
For the period ended May 3, Lowe's earned $540 million, or 49 cents per share. That compares with $527 million, or 43 cents per share, a year ago.
Analysts polled by FactSet expected higher earnings of 51 cents per share for the world's second-biggest home improvement retailer.
Lowe's stock declined $2, or 4.7 percent, to $40.45 before the market open.
Revenue for the Mooresville, N.C., company dipped to $13.09 billion from $13.15 billion. Wall Street predicted $13.45 billion.
Revenue at stores open at least a year, a key gauge of a retailer's health, fell 0.7 percent. This figure excludes results from stores recently opened or closed.
"Cooler than normal temperatures and greater precipitation resulted in a delayed spring selling season which impacted our results in exterior categories," Chairman, President and CEO Robert Niblock said in a statement.
Niblock said Lowe's overall results were weak in March but that there was significant improvement in April, which has carried over into the first few weeks of May.
Lowe's still expects fiscal 2013 earnings of about $2.05 per share, with revenue up approximately 4 percent. This implies revenue of $52.54 billion. Analysts forecast earnings of $2.09 per share on revenue of $52.39 billion.
The chain's quarterly report comes one day after Home Depot Inc.'s first-quarter results topped Wall Street's view and it raised its full-year outlook.