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Lowe's Companies (LOW - Get Report) posted weaker-than-expected first quarter earnings Wednesday, and trimmed its full-year outlook as rising costs hit profit margins, amid a series of disappointing reports from U.S. retailers.

Lowe's said earnings for the three months ending in April came in at $1.22 per share, up 2.5% from the same period last year but firmly shy of the Street consensus forecast of $1.33 per share. Group sales rose 2.2% to $17.7 billion, the company said, topping analysts' forecasts of $17.48 billion. Same stores sales, however, were pegged 3.5% higher than last year, topping the consensus forecast of a 3.2% gain. 

Looking into the current fiscal year, which ends in early 2020, Lowe's said its sees adjusted earnings in the range of $5.45 to $5.65 each, down from a prior forecast of $6.00 to $6.10. However, it also sees revenues rising 2% and comparable sales rising 3%, estimates that match forecasts issued earlier this year.

"Our first quarter comparable sales performance is a clear indication that the consumer is healthy and our focus on retail fundamentals is gaining traction. Our commitment to improving in-stocks and customer service coupled with our focus on winning with the pro customer were integral to driving improved sales," said CEO Marvin Ellison. "However, the unanticipated impact of the convergence of cost pressure, significant transition in our merchandising organization, and ineffective legacy pricing tools and processes led to gross margin contraction in the quarter which impacted earnings."

"We are taking the necessary actions to more systematically analyze and implement retail price changes to mitigate cost pressure," he added. "Our recent acquisition of the Retail Analytics platform from Boomerang Commerce will also assist in modernizing and digitizing our approach to pricing. We are still in the early stages of our transformation, and with the changes we are putting in place, we expect to deliver improved gross margin performance over the balance of the year."

Lowe's shares were marked 9.8% lower at the start of trading following the earnings release to change hands at $100.24 each, a move that would trim the stock's year-to-date gain to around 10%.

Lowe's disappointing earnings contrasted a strong start to the year for Target Corp. TGT, which posted stronger-than-expected first quarter earnings, and reaffirmed its full-year guidance, as the retailer extended its run of same-store sales gains despite increasing competition from Walmart (WMT - Get Report) and Amazon (AMZN - Get Report) .

Looking into the 2020 fiscal year, which ends in early January, Target said it sees low to mid-single digit growth for same store sales and adjusted and GAAP earnings of between $5.75 and $6.05 per share, both figures matching guidance the company provided earlier this year.

Target shares were marked 8.25% higher at $77.90 each.