February 26, 2014 / 11:51 AM / in 4 years

CORRECTED-UPDATE 1-Home improvement retailer Lowe's posts strong sales growth

(Corrects last paragraph to say Lowe’s shares rose about 34 percent in the past year, not 25 percent)

Feb 26 (Reuters) - Lowe’s Cos Inc reported strong sales growth in the fourth quarter, showing that the No. 2 U.S. home improvement retailer was closing in on market leader Home Depot Inc.

Lowe’s shares rose as much as 7 percent in premarket trading on Wednesday.

The company said its net sales rose 5.6 percent to $11.66 billion in the fourth-quarter ended Jan. 31. Analysts on average were expecting sales of $11.67 billion, according to Thomson Reuters I/B/E/S.

Lowe’s posted a 3.9 percent rise in comparable store sales.

Home Depot reported a 3 percent decline in overall sales on Tuesday, which some analysts viewed as an indication that the recent U.S. housing recovery was losing momentum.

Lowe’s said it expects 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 a profit of $2.64 per share on sales of $56.25 billion.

Lowe’s net income rose to $306 million, or 29 cents per share, in the fourth quarter from $288 million, or 26 cents per share, a year earlier. Analysts on average were expecting a profit of 31 cents per share.

The Mooresville, North Carolina-based company also said its board has authorized an additional $5 billion share repurchase program.

Lowe’s shares rose about 34 percent in the year to Tuesday’s close of $48.11 on the New York Stock Exchange. They trade at 18.03 times forward earnings, while Home Depot shares trade at 17.54 times. (Reporting by Maria Ajit Thomas in Bangalore; Editing by Joyjeet Das)

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