By Granth Vanaik

May 21 (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 ( HD )

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 ( HD ) 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.