NEW YORK — Lowe’s Cos. said Monday its net income rose 2.7 percent in the first quarter as people spent more money on home-improvement projects and bought more big-ticket items such as gas grills and riding mowers.
The No. 2 home-improvement retailer, 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.
Revenue at stores open at least a year rose 2.4 percent in the quarter. That’s a key figure for retailers because it measures growth at existing stores, rather than new ones.
On this same basis, measuring growth at stores open at least a year, the company noted a 1 percent rise in purchases over $500, citing strong demand for refrigerators, ranges, dishwashers and laundry products. But smaller tickets — those $50 or less — grew faster at 3 percent.
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.
Categories such as appliances, outdoor power equipment and seasonal living were among top performers in the quarter.
The company opened 11 stores in the quarter to finish with 1,721 in North America.
For the second quarter and full year, Lowe’s said it expects revenue to rise between 5 percent and 7 percent over the prior year and revenue at stores open at least a year to grow between 2 percent and 4 percent. Previously for the year, the company expected sales to rise between 4 percent and 6 percent, and revenue at stores open at least a year to increase 1 percent to 3 percent.
The company expects second-quarter earnings per share to range from 57 cents to 59 cents, shy of the 62 cents a share analysts expect.
For the full year, Lowe’s now expects earnings per share to range from $1.37 to $1.47. Previously it had expected a range of $1.30 to $1.42. Analysts expect earnings per share of $1.45 for the year on revenue of $49.67 billion, according to Thomson.
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
Follow The Trucker on Twitter at www.twitter.com/truckertalk.