(Adds details on Ackman's stake)
By Aishwarya Venugopal
May 23 (Reuters) - Lowe's shares rose 10 percent on Wednesday as billionaire hedge fund manager Bill Ackman was reported to be the second major investor to reveal a $1 billion stake in the home improvement retailer.
The Wall Street Journal reported here that Ackman's Pershing Square Capital Management LP had disclosed a roughly $1 billion stake in the company at a conference on Tuesday. Hedge fund D.E. Shaw Group also has an activist stake worth roughly $1 billion and has been pushing for changes behind the scenes.
Lowe's said on Tuesday it was replacing veteran chief executive Robert Niblock with J.C. Penney CEO Marvin Ellison, known for his success in piloting the company's biggest rival Home Depot a decade ago.
In its quarterly results on Wednesday, Lowe's stuck to its annual financial targets, brushing aside lower-than-expected same-store sales as driven chiefly by cold weather.
A prolonged winter in some U.S. states hit demand for outdoor products at Lowe's in the February-April period, but the company was optimistic about making up for lost business.
"We are anticipating recovering the majority of the sales miss in the first quarter ... So that's what we factored in to maintain our guidance," Chief Financial Officer Marshall Croom said on a conference call with analysts.
Many U.S. retailers have said that a late start to the spring shopping season has weighed on sales of lawn-mowers, patio furniture and other seasonal products.
Niblock said the company was already seeing a double-digit increase in same-store sales for May.
Shares of Lowe's, the No. 2 U.S. home improvement chain, jumped 9.5 percent to $93.92.
Sales at Lowe's stores open at least a year rose 0.6 percent in the three months ended May 4, while analysts on average had expected a 3.06 percent increase, according to Thomson Reuters I/B/E/S.
"While certainly a touch disappointing, (Lowe's report) wasn't a big surprise to us. We believe most of the (comparable-store sales) pressure to be more transitory in nature than structural," Gordon Haskett analyst Chuck Grom said.
Like Lowe's, its bigger rival Home Depot Inc last week blamed cold weather for missing Wall Street estimates on same-store sales.
Lowe's maintained its annual forecast for profit and same-store sales, while slightly raising its estimate for sales growth to reflect an accounting change.
The company's net income rose to $988 million or $1.19 per share in the quarter, while sales rose nearly 3 percent to $17.36 billion. Analysts had expected earnings of $1.22 per share and revenue of $17.46 billion.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sai Sachin Ravikumar