* Fourth-quarter earnings $0.29/share vs est $0.31
* Revenue rises 5.6 pct to $11.66 bln vs est $11.67 bln
* Comparable store sales increase 3.9 pct
* Shares rise more than 6 pct
(Adds CEO comments from conference call, housing data, updates
By Maria Ajit Thomas
Feb 26 Lowe's Cos Inc reported strong
growth in quarterly sales, showing that the No. 2 U.S. home
improvement retailer was narrowing the gap with market leader
Home Depot Inc.
Lowe's shares rose more than 6 percent in early trading,
after the company reported that net sales increased 5.6 percent
to $11.66 billion in the fourth quarter ended Jan. 31.
Home Depot on Tuesday reported a 3 percent decline in sales
in the same period, which was marked by winter storms and record
cold in much of North America.
Lowe's big rival is more dependent on contractors, who had
trouble working on projects in the stormy quarter.
"When extreme winter weather arrived late in the quarter,
our distribution network responded quickly and efficiently to
move product where it was most needed," Lowe's CEO Robert
Niblock said in a statement on Wednesday.
Demand was strong for products such snow blowers, space
heaters and fittings to fix broken pipes, the company said.
Home Depot's results had raised concerns that the U.S.
housing recovery was losing momentum. But Niblock said Lowe's
continued to see strength in "recovery markets" such as
California, Arizona and Florida.
"With consumers more willing to invest in their homes, the
job and income growth forecasted for 2014 should provide the
wherewithal for continued home improvement spending," Niblock
said on a call with analysts.
The U.S. Commerce Department said on Wednesday that sales of
new single-family homes surged to a 5-1/2 year high in January.
Lowe's, which struggled to catch up with Home Depot after
the recession, has tried to arrest market-share losses by
offering discounts and products aimed at specific regions.
The company posted a 3.9 percent rise in comparable store
sales in the fourth quarter. It also said its board had
authorized an additional $5 billion share repurchase program
Lowe's gross margin expanded to 34.67 percent in the quarter
ended Jan. 31 from 34.27 a year earlier.
"We believe that Lowe's has made significant operational
strides, and is now positioned to benefit from its investments
in its store resets and product line reviews," Credit Suisse
analyst Gary Balter wrote in a note to clients.
Lowe's reported a 6.3 percent rise in fourth-quarter net
income to $306 million, or 29 cents per share, up from $288
million, or 26 cents per share, a year earlier.
"For businesses that are this mature, to find growth like
this is fairly difficult," Morningstar analyst Jaime Katz said.
Analysts on average were expecting a profit of 31 cents per
share, according to Thomson Reuters I/B/E/S.
Home Depot's net profit fell about 1 percent in the quarter.
Lowe's said it expected 2014 total sales to rise by about 5
percent. That translates to about $56.07 billion.
The company also forecast earnings of about $2.60 per share
for the year ending Jan. 30, 2015. Analysts on average were
expecting $2.64 per share on sales of $56.25 billion.
Lowe's shares were up 5.2 percent at $50.64 in late-morning
trading on the New York Stock Exchange. They had risen about 34
percent in the year up to Tuesday's close.
Home Depot's shares, which were up 1.9 percent at $82.50,
rose about 27 percent in the same period.
Lowe's shares were trading at 18.03 times forward earnings
as of Tuesday's close, while Home Depot shares were trading at
(Reporting by Maria Ajit Thomas in Bangalore; Editing by
Joyjeet Das and Ted Kerr)