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May 24 (Reuters) - Lowe’s Cos Inc, the No. 2 U.S. home improvement retailer, reported lower-than-expected quarterly profit and comparable sales, sending its shares down 7 percent in premarket trading on Wednesday.
Lowe’s results were a contrast to those of larger rival Home Depot Inc, which reported quarterly profit and same-store sales above analysts’ estimates last week, buoyed by higher customer spending on expensive items.
Lowe’s focus on the do-it-yourself customer has led it to lag Home Depot, whose focus on high-spending professional contractors has helped it benefit more from the strength in the housing market.
Home improvement has remained a bright spot in the gloomy U.S. retail industry, as a strong labor market and historically low mortgage rates drive demand for housing.
Sales at Lowe’s stores open at least for a year rose 1.9 percent, below the 2.6 percent rise expected by analysts polled by research firm Consensus Metrix.
Net income fell to $602 million, or 70 cents per share, in the first quarter ended May 5, from $884 million, or 98 cents per share, a year earlier.
Lowe’s recorded a $464 million pre-tax loss on extinguishment of debt in connection with its $1.6-billion cash tender offer.
Excluding items, the company earned $1.03 per share, missing the average analysts’ estimate of $1.06 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 10.7 percent to $16.86 billion, slightly below the average analyst expectation of $16.96 billion.
Lowe’s shares were trading at $76.30 in premarket trading. Up to Tuesday’s close, the stock had risen about 16 percent this year. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Arun Koyyur)