* Forecasts FY17 sales of $68.27 bln vs. est. $64.60 bln
* Q4 comp sales up 5.1 pct vs. est. rise of 2.2 pct
* Sales $15.78 bln vs. est. $15.39 bln
* Adj. profit $0.86/shr vs. est. $0.79/shr
* Shares rise as much as 11.4 pct to $82.85
(Adds CEO comment, details from conference call)
By Gayathree Ganesan
March 1 Lowe's Cos Inc forecast 2017
sales that topped estimates and reported better-than-expected
quarterly comparable sales and profit, helped by a robust
housing market that encouraged Americans to spruce up their
homes or buy new ones.
Shares of the No. 2 U.S. home improvement retailer rose as
much as 11.4 percent to $82.85 on Wednesday, their biggest
intraday percentage gain in more than eight years.
Homebuilding in the United States jumped 11.3 percent in
December as a firming economy and higher wages boosted demand
"Lowe's has generated growth in its core, underlying
business, and has done so at a pace that is well above the
previous two quarters," GlobalData retail analyst Hakon Helgesen
wrote in a client note.
The company reported a better-than-expected 5.1 percent rise
in comparable sales in the fourth quarter - a strong rise after
posting sales of 2.7 percent in the third quarter and 2 percent
in the second quarter.
Improvements in customer service, which include providing an
enhanced level of advice for bigger projects, helped Lowe's
attract and convert more DIY customers and first-time
homeowners, Helgesen added.
"When you look at our 2017 guidance, we expect that our
growth in sales will be driven by a continued increase in
average ticket and a continued increase in transactions," Chief
Executive Officer Robert Niblock told Reuters.
Total customer transactions rose 15.1 percent, while average
spending by Lowe's customers increased 3.6 percent in the latest
quarter, which ended Feb. 3.
Lowe's also forecast 2017 sales of $68.27 billion and
adjusted earnings of $4.64 per share, beating analysts'
estimates, according to Thomson Reuters I/B/E/S.
Net sales rose 19.3 percent to $15.78 billion in the latest
quarter, helped by its acquisition of Canada-based Rona Inc
in May. Analysts on average expected $15.39 billion.
Excluding items, the company earned 86 cents per share,
beating analysts' average estimate of 79 cents.
LOWE'S VS. HOME DEPOT
Lowe's same-store sales performance has lagged Home Depot
Inc in the past several quarters, mainly due to its focus
on do-it-yourself (DIY) customers, who spend less on big-ticket
items compared with professionals.
Home Depot, which gets about 40 percent of its revenue from
professionals, reported a stronger-than-expected 5.8 percent
rise in holiday-quarter comparable-store sales last month.
In contrast, Mooresville, North Carolina-based Lowe's gets
only a third of its total sales from professional customers.
Lowe's said it expects comparable-store sales to rise 3.5
percent in 2017, while Home Depot forecast an increase of 4.6
(Reporting by Gayathree Ganesan in Bengaluru; Editing by Sriraj
Kalluvila and Martina D'couto)