By Andria Cheng, MarketWatch NEW YORK (MarketWatch) — Home Depot Inc., the world’s largest home-improvement retailer, said Tuesday that its fiscal first-quarter profit rose 12%, as expense control helped to make up for a decline in sales. Shares of Home Depot HD +2.22% added about 2% in early trade. The company said its quarterly profit rose to $812 million, or 50 cents a share, from $725 million, or 43 cents a share, in the year-earlier period. Sales in the quarter ended May 1 dipped 0.2% to $16.8 billion, the Atlanta-based retailer said. Analysts, on average, expected the company to earn 49 cents a share on sales of $17.1 billion, according to a FactSet Research survey. Home Depot raised its full-year profit forecast to $2.24 a share based on its year-to-date performance and factoring in the benefit of share repurchases. In February, the company predicted a profit, excluding the impact of any share repurchases, of $2.20 a share for the year. Analysts surveyed by FactSet projected a profit of $2.30 a share, on average. The company maintained its sales-growth guidance of 2.5%. First-quarter comparable sales dropped 0.6%, including a 0.7% decline in the U.S., which suffered from a slow selling season. Like its smaller rival Lowe’s Cos. LOW +0.24% , Home Depot has seen lower demand for seasonal merchandise because of cold and damp weather in the Northeast and Midwest in April. The companies also faced tough comparisons against year-earlier results, when appliance demand was helped by a federal-rebate program and sales were boosted by the home-buyer credit, analysts said. Home Depot’s results came a day after Lowe’s cut its forecast, saying that rising fuel costs and other inflationary pressures have hurt homeowners’ future spending plans. Lowe’s said that with the housing market still troubled and home sales and values still declining, consumers remain reluctant to make big-ticket discretionary purchases. See story on Lowe’s results. On a brighter note, analysts expect the sector to benefit from consumers’ pent-up demand for small home-improvement and remodeling projects, even as the housing market stays in a slump. In February, Home Depot reported its best same-store-sales performance in five years, as the company saw business stabilizing even as the housing market remained weak. Home Depot has said its performance is less correlated with the housing market than with the overall growth of the U.S. economy. In the latest quarter, selling, general and administrative expenses fell 1.7% to $4 billion. The company’s cost of sales also declined 0.7% to $10 billion.

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