By Granth Vanaik

(Reuters) -Lowe’s Cos reported a lower-than-expected drop in quarterly sales on Tuesday, helped by more small-scale repairs undertaken by inflation-hit Americans, who have otherwise cut back on big-ticket discretionary home improvement projects.

The North Carolina-based company’s shares rose about 2.5% before the bell after Lowe’s also reaffirmed its annual sales and profit target.

Rival Home Depot last week reiterated its annual targets hoping that demand would recover in the second half.

“Expectations for Lowe’s were a little bit lower (after Home Depot’s results) and people thought it may have a chance to miss earnings but instead they were actually able to beat,” said Telsey Advisory Group’s Joe Feldman.

While higher prices of essentials has made customers wary about undertaking expensive repairs, they have been willing to shell out on smaller repair works, helping prop up sales at home-improvement retailers.

Lowe’s has also been able to sustain demand from its pro-customers, which include professional builders, contractors and handymen, helping it counter the weakness from its do-it-yourself customers, who have cut back spending on home decor categories.

Visits to Lowe’s were also up by 0.2% on a year-over-year basis in April, having dropped 1.1% in March and 2.8% in February, according to data analytics firm Placer.ai.

It said the launch of its DIY loyalty program nationally during the quarter to attract more customers as well as expansion of its same-day delivery options helped it take market share in key categories.

Same-store sales at Lowe’s fell 4.1%, compared to estimates of a 5.65% decline.

“Lowe’s went from what looked like an earlier quarter ‘miss’ to modest upside given a late quarter surge as spring started to break in different parts of the country,” said Truist Securities analyst Scot Ciccarelli.

The home improvement chain earned $3.06 per share for the quarter ended May 3. Analysts on average had expected a profit of $2.94, according to LSEG data.

(Reporting by Granth Vanaik in Bengaluru; Editing by Maju Samuel)