(Corrects first bullet point and adds paragraph 17 to reflect that the company’s profit, excluding a benefit from a share sale, is comparable with average analyst estimate)
* First-quarter adjusted earnings $0.96/share vs est. $0.99
* Sales rise 2.9 pct to $19.69 bln vs est. $19.95 bln
* Reiterates full-year sales growth forecast
* Shares down 1 pct premarket
By Maria Ajit Thomas
May 20 (Reuters) - Home Depot Inc reported lower-than-expected quarterly sales as its spring selling season got off to a slow start after a severe winter in many parts of the United States.
The world’s largest home improvement chain gets much of its business from building contractors, who are vulnerable to weather-related disruptions. Spring is also an important time for Home Depot, as households prepare their gardens and get set for the barbecue season.
Home Depot shares fell 1.4 percent in premarket trading.
The company maintained its sales growth forecast of 4.8 percent for the year ending January, but analysts were skeptical.
A slowing recovery in the U.S. housing market could make it difficult for Home Depot to meet its reiterated sales growth forecast for the year, they said.
“We remain neutral as we worry that a weaker housing market will impact sales as the year progresses,” Janney Capital Markets analyst David Strasser wrote in a note.
Home Depot said it had “solid results” in markets that were not affected by harsh winter weather.
Brian Sozzi, chief executive of Belus Capital Advisors, said slowing U.S. home sales have left Home Depot stores with high inventory of building supplies such as lumber, plywood and roofing material.
U.S. homebuilder sentiment weakened unexpectedly in May to its lowest in a year, the National Association of Home Builders said last week.
Sales of previously owned homes fell each month in the first quarter, while new home sales declined in February and March.
Home Depot rival Lowe’s Cos Inc will report its results on Wednesday.
Home Depot also raised its full-year earnings forecast to $4.42 per share from $4.38 per share.
The increase reflects a 4 cents per share benefit from the sale of shares in HD Supply Holdings Inc and Home Depot’s share buybacks this year.
The company said it intended to buy back up to $3.75 billion additional shares this year.
Home Depot’s sales rose 2.9 percent to $19.69 billion in the first quarter ended May 4. Comparable-store sales increased 2.6 percent.
Net income rose to $1.38 billion, or $1.00 per share, in the first quarter from $1.23 billion, or 83 cents per share, a year earlier.
The company earned 96 cents per share, excluding a 4 cent benefit related to the sale of HD Supply shares.
Analysts on average had expected a profit of 99 cents per share on sales of $19.95 billion, according to Thomson Reuters I/B/E/S.
Home Depot’s shares were trading at $75.36 before the bell on Tuesday. Lowe’s stock was down about 1 percent at $45.15. (Editing by Kirti Pandey)