(Reuters) - Lowe's (NYSE:LOW) Cos Inc said on Wednesday demand for home improvement products was more buoyant than its expectations despite vaccine rollouts after reporting a near 26% jump in quarterly same-store sales.
Stuck-at-home Americans fueled a surge in sales of tools and building materials at Lowe's and larger rival Home Depot Inc (NYSE:HD) in the last year, as homeowners with limited options for travel or leisure activities due to the pandemic used more of their discretionary income on minor remodeling and repairs.
The boom was expected to slow following speedy vaccinations and easing of COVID-19 curbs, but the stimulus checks in March boosted demand, Lowe's said.
A surge in lumber prices also helped same-store rise 25.9% in the first quarter ended April 30, beating analysts' estimates for a 19.2% increase, according to IBES data from Refinitiv.
"The underlying drivers of home improvement demand appear to be more resilient and stable than we originally forecasted," Chief Financial Officer David Denton said on an analysts call.
May comparable sales were still up around 37% compared to 2019 levels, Denton said, but added the company anticipates a modest shift in spending away from home improvement as the economy reopens.
Lowe's growth in same-stores sales fell short of the 31% jump Home Depot reported on Tuesday, the first time it has lagged its arch rival since the start of the health crisis.
Shares of Lowe's, which have gained over 65% in the last year, fell 2.6%. Evercore ISI analysts said investors were likely expecting a bigger beat following Home Depot's blowout quarter.
Total net sales at Lowe's rose 24.1% to $24.42 billion in the first quarter, beating estimates of $23.86 billion, while net earnings of $3.21 per share also topped expectations of $2.62.