Lowe’s Shares Rise on Profit Increase of 31%

Shares of Lowe’s Cos. rose Monday after the nation’s No. 2 home improvement retailer posted a 31% gain in its first-quarter profit.

The earnings fell short of Wall Street’s expectations, but investors appeared to accept the chain’s explanation that an unseasonably cool March in key markets such as the Northeast was the chief culprit for it missing its guidance.

Cold and rainy weather cut into sales of nursery products, lumber and seasonal living items, as consumers were prevented from working on their homes, Lowe’s Chairman and Chief Executive Robert Niblock said.

“As we analyze our first quarter, we clearly think weather had the biggest impact on sales and kept us from achieving our original guidance,” Niblock told analysts during a conference call.

Atlanta-based Home Depot Inc., the market leader, reports its earnings today.

Quarterly income at Lowe’s grew to $590 million, or 74 cents a share, in the three months ended April 29, up from $452 million, or 56 cents a share, a year ago. Sales rose 14% to $9.91 billion from $8.68 billion last year.

Analysts surveyed by Thomson First Call expected earnings per share of 76 cents on sales of $9.97 billion.

Lowe’s shares rose $2.94, or 5.6%, to close Monday at $55.80 on the New York Stock Exchange, where they have traded in a 52-week range of $45.90 to $60.54.

Niblock reported that comparable-store sales -- a key factor because they measure results in stores that have been open at least a year -- were up 3.8% in the quarter. That compared with a rise of 9.9% in the first quarter of 2004.

“While our comps fell short of our projections of 5% to 6% at the beginning of the quarter, we are not surprised by it because the weather affected our business in March,” Niblock told analysts.

Once the weather improved in April, Niblock said, Lowe’s recorded the first $1-billion sales week in its history.

Lowe’s is now forecasting second-quarter earnings of $1 to $1.02 a share and $3.25 to $3.34 a share for the year. Analysts projected earnings per share of $1.02 for the second quarter and $3.30 for the year.

Lowe’s also forecast sales growth of 15% to 16% for the second quarter and full-year growth of about 17%.

Analysts expect the company to post sales of $11.83 billion for the quarter and $42.54 billion for the year.

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Limited Brands’ Profit Down 76% on Express

Retailer Limited Brands Inc., dragged down in part by big merchandising mistakes at its Express stores, reported Monday that first-quarter profit fell 76% from last year when it had a large one-time gain.

The operator of chains including Victoria’s Secret and Bath & Body Works missed analysts’ expectations and lowered its earnings forecast for the second quarter and full year.

Net income for the quarter that ended April 30 totaled $23.1 million, or 6 cents a share, compared with $96.6 million, or 19 cents a share, a year earlier.

Revenue edged down to $1.97 billion from $1.98 billion in the year-earlier period.

A year earlier, the company reported a gain of $44.9 million, or 6 cents a share, from the repayment of a note stemming from the sale of its New York & Co. chain in November 2002.

Analysts surveyed by Thomson First Call expected earnings of 8 cents a share for the latest quarter.

The retailer said sales at stores open at least a year -- considered a key indicator of a retailer’s strength -- fell 5% for the quarter.