Lowe’s Cos., operator of 16 home improvement stores in Connecticut, said Monday its net income rose 2.7 percent in the first quarter as people spent more money on renovation projects and bought more big-ticket items such as gas grills and riding mowers, The Associated Press reports.
The No. 2 home-improvement retailer raised its guidance for the year, though it fell shy of analyst expectations and shares fell.
The company, based in Mooresville, N.C., said it earned $489 million, or 34 cents a share, in the three-month period ended April 30. In the same period last year the Mooresville, N.C., company earned $476 million, or 32 cents a share.
Revenue rose 4.7 percent to $12.39 billion.
The results handily beat the expectations of analysts. According to Thomson Reuters, analysts expected the company to earn 31 cents a share on revenue of $12.24 billion.
Home improvement retailers have been hurting in the weak economy as shoppers cut back on their spending to focus on only essentials. But CEO Robert Niblock said people are again taking on projects and buying big-ticket items. Government stimulus programs, including tax credit for home buyers and rebates for energy-efficient products, and warmer weather also helped results, he said. He was careful to caution that this doesn’t mean a full rebound is in sight.
“We’re optimistic we’ll continue to see solid sales through the balance of the year with gradual improvement in core demand, but we still view 2010 as a year of transition for our industry, and it will likely be 2011 before we see significant growth,” he told investors on a conference call.
Lowe’s said the government stimulus program helped appliance sales rise on a year-over-year basis in the quarter and the company continued targeting those who qualified for the first-time home-buyer tax credit, expecting they might want to buy new appliances. The credit expired April 30.
The company opened 11 stores in the quarter to finish with 1,721 in North America.
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