Despite beating analysts' first-quarter expectations on Tuesday, Home Depot's ( HD)turnaround story still appears to be a work in progress. The home improvement retailer exceeded consensus estimates by 2 cents a share. But analysts had set the bar fairly low. Meanwhile, the company reported slow sales growth and a large jump in inventories. "We accomplished a lot in this quarter, but I would be very quick to say that we still have much to look forward to this year," said Bob Nardelli, Home Depot's CEO, on a conference call. For the quarter, Home Depot earned $907 million, or 39 cents a share. On a per-share basis, earnings increased 8.3% from the $856 million, or 36 cents a share, the company earned in the year-ago quarter. Overall sales increased 5.8% year over year to $15.1 billion. On a same-store basis, which compares results at like outlets open more than one year, sales fell 1.6%. Analysts had been expecting earnings of 37 cents on $15.05 billion in sales, according to Thomson First Call. Home Depot had not given guidance for the first quarter, but had previously said it expected its full-year earnings to grow 9% to 14% over last year on sales growth of 9% to 12%. The company reiterated that guidance Tuesday. Wall Street reacted favorably to the company's report, sending Home Depot shares up $2.64, or 9.4%, in late-morning trading. The jump in Home Depot shares contrasted with chief rival Lowe's ( LOW), whose shares dropped further on Tuesday after tumbling more than 9% on Monday. Lowe's beat analysts' earnings projections on Monday, but posted slower sales growth than expected. Home Depot shares are the ones that have been under pressure for much of the last year as sales and earnings have slowed, trailing behind Lowe's. Home Depot has acknowledged its problems by embarking on a wide-scale program to renovate its stores and change its merchandise assortment. The program seems to be working.