Home Depot Inc boosted its sales and profit forecasts for the year after a stronger-than-expected first quarter, providing a rare dose of good news to a gloomy retail sector.

The world's biggest home improvement chain has benefited as consumers cut back spending on items such as apparel and accessories and instead spend more on big-ticket purchases such as houses and home renovations.

The company's quarterly results stand in stark contrast to those of retailers such as Macy's Inc and Kohl's Corp , which reported a drop in sales in the quarter.

"After last week's dismal set of retail trading updates, Home Depot provides some much needed relief and also an indication of where consumers are spending their money," HKakon Helgesen, an analyst at research firm Conlumino, said in a note.

Home Depot said its strong start to the year was helped by "week-to-week demand spikes caused by weather variability" that resulted in growth across its business.

The company sells appliances and lawn and garden products as well as building materials.

U.S. housing starts rose a stronger-than-expected 6.6 per cent in April, data showed on Tuesday.

Housing starts hit their highest level in five months in February, before falling more than expected in March.

SAME-STORE SALES JUMP

Home Depot's shares, which as of Monday's close had risen 19.4 per cent in the past 12 months, were down 1.1 per cent before the bell.

"We believe that February was the strongest month (for Home Depot), driven by a 'warm winter' and unseasonal weather last year in many areas," J.P. Morgan analyst Christopher Horvers wrote in a client note. "March was solid and then April slowed with normal spring weather volatility affecting sales."

Sales at Home Depot's U.S. stores open for more than a year rose 7.4 per cent in the quarter ended May 1, well above the 4.9 per cent average forecast of analysts surveyed by research firm Consensus Metrix.

The company's net income rose 14 per cent to US$1.80 billion, or US$1.44 per share, while net sales rose 9 per cent to US$22.76 billion.

Analysts on average had expected earnings of US$1.36 per share and revenue of US$22.39 billion, according to Thomson Reuters I/B/E/S.

Home Depot said it now expected full-year earnings of about US$6.27 per share, with overall sales growing about 6.3 per cent and comparable sales increasing by about 4.9 per cent.

The company had previously forecast earnings of US$6.12-US$6.18 per share on overall sales growth of 5.1-6.0 per cent and comparable sales growth of 3.7-4.5 per cent.