Home improvement retailer Lowe's (NYSE:LOW) today posted first-quarter earnings results that failed to meet Wall Street's high expectations. Sales and profits both improved, but at a surprisingly slow pace. The retailer also held firm on its 2015 outlook even as rival Home Depot (NYSE:HD) boosted its forecast just yesterday. 

Source: Lowe's.

Here's a look at how Lowe's headline results stacked up against Wall Street's first-quarter targets:

Metric Expected Actual
Revenue $14.3 billion $14.1 billion
Earnings $0.74 per share $0.70 per share

"Expected" is the average forecast of the 27 analysts who cover Lowe's stock. Sources: company financial filings and Yahoo! Finance.

Comparably weak sales growth
Like Home Depot, Lowe's managed record results over the last three months. Revenue and comparable-store sales both rose by 5% as the retailer moved more than $14 billion of merchandise. And the improvement was broad-based, according to management. "We generated comparable-store sales growth in all regions of the country and across all product categories," CEO Robert Niblick said in a press release. The housing market recovery is clearly benefiting both retailers.

However, the sales gains look less impressive in comparison to Home Depot's results. Lowe's larger competitor yesterday posted 7% comps on what CEO Craig Menear called a "stronger than expected start to the year." Home Depot at the same time raised its full-year comps expectations from 4% to 5% while Lowe's simply reiterated its prior 4% forecast.

Profits and 2015 outlook
Lowe's profit jumped 15% higher to hit $0.70 per share in the quarter, but Wall Street wanted more. Analysts were expecting the same 21% earnings gain that Home Depot managed in the quarter. Instead, Home Depot extended its profitability lead over its rival: Operating margin is still almost 60% higher in that business than at Lowe's.

LOW Operating Margin (TTM) Chart

LOW Operating Margin (TTM) data by YCharts

Lowe's returned plenty of cash to shareholders in Q1. It spent $1 billion repurchasing its stock while sending $222 million out in dividend payments. Management's goal is to return all of the business's excess cash to shareholders, and so investors can expect dividends and buybacks to both keep marching higher along with earnings.

Management reiterated its full-year outlook that calls for solid sales and profit growth in 2015. Revenue is expected to tick higher by 5% as earnings rise to $3.29 per share from last year's $2.70-per-share result.

Lowe's sees its operating margin rising by a full percentage point from 2014's 7.6%. But that's still far from the 13% profitability that Home Depot is expecting to hit over the same time frame.