(Reuters) - Home Depot Inc (HD.N), the world’s largest home improvement chain, said its sales were “robust” in May and that it expected to realize in the current quarter most of the sales lost in the first quarter due to a severe winter in the United States.
Shares of the company, which reported lower-than-expected first-quarter sales, rose 2.7 percent in morning trading on Tuesday.
Home Depot said its sales of landscape items and products such as concrete were improving as a result of repairs needed after the harsh winter weather.
The company gets much of its business from building contractors, who are vulnerable to weather-related disruptions. Spring is also an important time for the company, as households prepare their gardens and get set for the barbecue season.
Home Depot maintained its sales growth forecast of 4.8 percent for the year ending January, but analysts were skeptical.
A slowing recovery in the U.S. housing market could make it difficult for Home Depot to meet its reiterated sales growth forecast, they said.
“We remain neutral as we worry that a weaker housing market will impact sales as the year progresses,” Janney Capital Markets analyst David Strasser wrote in a note.
U.S. homebuilder sentiment weakened unexpectedly in May to its lowest in a year, the National Association of Home Builders said last week.
Sales of previously owned homes fell each month in the first quarter, while new home sales declined in February and March.
Home Depot, however, said that though housing statistics were not as robust as last year, they were not materially different from the assumptions the company based its expectations on.
“Our fundamental view of the recovery in the home improvement market has not changed,” Chief Executive Francis Blake said on a post-earnings call.
Home Depot rival Lowe’s Cos Inc (LOW.N) will report its results on Wednesday.
Home Depot also raised its full-year earnings forecast to $4.42 per share from $4.38 per share.
The increase reflects a 4 cents per share benefit from the sale of shares in HD Supply Holdings Inc and share buybacks this year.
The company said it intended to buy back up to $3.75 billion additional shares this year.
Home Depot’s sales rose 2.9 percent to $19.69 billion in the first quarter ended May 4. Comparable-store sales increased 2.6 percent.
Net income rose 12 percent to $1.38 billion, or $1.00 per share. The company earned 96 cents per share, excluding a 4 cent benefit related to the sale of HD Supply shares.
Analysts on average had expected a profit of 99 cents per share on sales of $19.95 billion, according to Thomson Reuters I/B/E/S.
Home Depot shares were up at $78.60 on the New York Stock Exchange. The stock fell 7 percent this year to Monday’s close.
Editing by Kirti Pandey