Lowe's Cos Inc reported on Wednesday a 25.9% jump in quarterly same-store sales growth that failed to match that of larger rival Home Depot Inc, signaling it was slipping further behind after gaining ground during the pandemic.
Sales of tools, paint and building materials to Lowe's core base of do-it-yourself homeowners surged since the start of the COVID-19 pandemic, helping the company outpace growth at Home Depot, where a comparatively larger portion of revenue comes from builders and handymen.
However, as virus restrictions ease, those high-spending customers have been returning to Home Depot's stores for tools to complete a backlog of projects, helping the company post a much better-than-expected 31% jump in same-store sales and putting it back ahead of Lowe's in terms of growth for the first time in a year.
Lowe's shares fell about 2% before the bell. They have gained over 65% in the last year, compared with the 29% jump for Home Depot's stock.
Still, both companies benefited in the reported quarter as fresh stimulus checks helped home improvement demand remain resilient even as speedy vaccinations and the reopening of economies threaten to ease the pandemic-fueled boom.
Lowe's said it was tracking ahead what it calls a "robust market scenario" for the full year, which estimates fiscal 2021 sales of $86 billion or down about 4% from last year.
Total net sales at Lowe's rose 24.1% to $24.42 billion in the first quarter ended April 30, beating estimates of $23.86 billion, according to IBES data from Refinitiv.
Lowe's net earnings rose to $2.32 billion, or $3.21 per share, from $1.34 billion, or $1.76 per share, a year earlier. Analysts had expected a profit of $2.62 per share.
(Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)