Lowe's rebounded strongly from the weak winter season, but its sales and profit increases were lower than those of rival Home Depot. Fred Katayama reports.
Lowe's just couldn't do it as well as Home Depot. The U.S.' second largest home improvement retailer bounced back from the mean winter with big increases in quarterly profit and sales as customers bought tools to do the work they had put off. But those increases were less than that of its bigger rival. And Lowe's cut its full-year sales growth forecast to 4.5 percent whereas Home Depot kept its target at 4.8 percent. That slightly soured outlook pressured Lowe's shares in early trading. Its stock had jumped up to within a whisker of its all-time high yesterday, lifted by the surprisingly strong results from Home Depot. Deutsche Bank analyst Mike Baker says he's not concerned by the reduced forecast, noting, "This is simply because of the weak first quarter... Importantly, the full year sales view suggests no change to the back half outlook." Indeed, Lowe's was bullish about the consumer, predicting that home improvement spending will keep getting better. The housing recovery, which stalled late last year, appears to be back on track. Housing starts snapped a two-month streak of declines, surging to an eight-month high last month.