Lowe's reports higher-than-expected same store sales

(Reuters) - Lowe's Companies Inc's quarterly profit missed analysts' estimates as the No.2 U.S. home improvement chain's margins fell, sending its shares down nearly 8 percent in premarket trading on Wednesday.

Lowe's net income fell to $554 million, or 67 cents per share, in the fourth quarter ended Feb. 2, from $663 million, or 74 cents per share, a year earlier that included an extra week.

Excluding one time items the company earned 74 cents.

Analysts on average had expected earnings of 87 cents per share, according to Thomson Reuters I/B/E/S.

The company's gross margins fell to 33.73 percent from 34.41 percent. Analysts were expecting 34.27 percent.

Lowe's operating margins and net margins also dropped.

Net sales fell nearly 2 percent to $15.49 billion, but topped analysts estimates of $15.33 billion.

Sales at Lowe's stores open at least a year rose 4.1 percent, also above analysts estimate of 3.1 percent.

Last week, Lowe's bigger rival Home Depot Inc reported quarterly profit that topped market estimates for the sixth straight quarter as it drew in more shoppers who spent more on average amid an improving housing market.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Savio D'Souza)