Investing.com -- Lowe’s (NYSE:LOW) reported first-quarter net sales that topped analysts' estimates, as the DIY-retailer was boosted by growth in its online offerings and services for professionals.
Shares in the firm were lower in early U.S. trading on Tuesday, reversing premarket gains. Lowe's flagged that operating margins will likely be under pressure during the current quarter, Reuters reported.
Like other big-box chains, Lowe's has been hit by customers choosing to postpone purchases on big-ticket items needed for home improvement projects during a time of elevated inflation and high interest rates.
However, the company said that this decline in discretionary spending was being partially offset by positive comparable sales in its digital store and Pro option, which caters to contractors.
Chief Executive Marvin Ellison added that Lowe's took "market share in key categories" following the roll out of a new nation-wide loyalty program and expanded same-day delivery options.
Net sales at the North Carolina-based group came in at $21.36 billion in the three months ended on May 3, slipping by 4.4% compared to the year-ago period. However, the total was above Bloomberg consensus estimates of $21.13 billion.
Diluted earnings per share dropped to $3.06 from $3.77 a year ago. Operating margin dipped to 12.4%, slightly above Wall Street estimates of 12.3%.
Lowe's also confirmed its full-year outlook, with Ellison noting that it is "pleased" with the start to its spring performance. Annual sales are projected to be between $84 billion to $85 billion, while diluted per-share income is seen at $12.00 to $12.30.
"[T]hese results show Lowe's executing well amid a tough top-line backdrop, keeping the business primed for improved profitability when the industry/home improvement market turns," analysts at Morgan Stanley said in a note to clients.