(Reuters) - Home improvement chain Lowe’s Cos Inc (LOW.N) reported a lower-than-expected quarterly profit and cut its full-year earnings forecast, hurt by a shorter spring in the northern United States and fewer big-ticket purchases at its stores.
Lowe’s shares were down 6.8 percent in late morning trading on Wednesday.
While Home Depot’s sales got a big boost from big-ticket items such as appliances and roofing products, Lowe’s reported average sales.
Number of transactions worth over $500 rose 2.9 percent in the second quarter ended July 29, Lowe’s said. In contrast, Home Depot reported a 9.5 percent rise in big-ticket purchases worth over $900.
Sales in northern United States were challenged by a short spring, which hindered outdoor projects, Lowe’s Chief Customer Officer Mike Jones said on a conference call.
An early spring this year also led to a number of outdoor projects being moved to the first quarter from the traditional second quarter, hurting Lowe’s comparable sales, which fell 2.8 percent in May.
Lowe’s gets a bigger chunk of its revenue from outdoor business, which benefited from a warmer-than-usual March and April, compared with Home Depot, Edward Jones analyst Robin Diedrich said.
“That has come back to haunt them here in the second quarter,” Diedrich added.
Lowe’s also lowered its full-year earnings forecast to $4.06 per share from $4.11, saying the cut reflected its acquisition of Canada’s Rona Inc that was completed in May.
Net sales rose 5.3 percent to $18.26 billion, below the $18.45 billion analysts had expected. Home Depot’s sales rose 6.6 percent.
Sales at Lowe’s stores open more than 13 months rose 2 percent, compared with the 4.1 percent growth expected by analysts polled by research firm Consensus Metrix. Home Depot’s same-store sales rose 4.7 percent.
Lowe’s net income rose to $1.17 billion, or $1.31 per share, in the quarter, from $1.13 billion, or $1.20 per share, a year earlier.
Lowe’s shares were trading at $75.89 on the New York Stock Exchange.
Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Anil D'Silva