WOWCD Woolworths Ltd

Lowe's Cos. said profit dropped in its latest quarter following its decision to exit an Australian joint venture, though adjusted earnings rose and the company offered upbeat guidance for the year.

Last month, the home-improvement retailer said it would sell its 33.3% stake in an unprofitable Australian home-improvement store venture to Woolworths, which would it turn look to sell or liquidate the business after the two together invested roughly three billion Australian dollars into the struggling chain.

As a result of the divestiture, Lowe's booked a $530 million charge in the quarter. Including that hit, the company reported a profit of $11 million, or a penny a share, down from $450 million, or 46 cents, a year earlier. Excluding the impairment, earnings rose to 59 cents.

Revenue rose 5.6% to $13.24 billion. Analysts projected 59 cents in adjusted earnings per share and $13.07 billion in sales, according to Thomson Reuters.

Lowe's results follow a strong report from bigger rival Home Depot this week. The home improvement retailers have seen their sales rise while companies in other corners of the retail sector struggle. Though Americans have curbed spending on things like apparel and electronics, they have been willing to shell out to refurbish their homes.

In the latest quarter, Lowe's said warm weather helped bolster demand for exterior products. Sales at stores open at least a year climbed 5.2%, better than the year-ago clip, as traffic increased.

For the full-year, Lowe's expects comparable-store sales to rise 4%. The company projects $4 in earning per share this year, higher than the $3.97 analysts have predicted.

Shares in the company, down 11% this year through Tuesday's close, were inactive in premarket trading.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

February 24, 2016 07:15 ET (12:15 GMT)

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