Top home improvement chain Home Depot Inc backed its sales outlook and raised its profit forecast for the year despite a slow start to the key spring selling season, sending its shares up.

The results came a day after smaller rival Lowe's Cos cut its forecast for the year after missing both sales and earnings estimates in the first quarter.

Home Depot's forecast on Tuesday soothed some concerns about demand in the world's largest economy and reassured investors that the slow start to the season was mainly a factor of inclement weather in many parts of the United States.

Home Depot reported a relatively strong quarter after what was implied from Lowe's yesterday, analyst David Strasser at Janney Capital Markets said. This is an impressive quarter considering the difficult weather and tough compares.

Non-weather related products in categories such as electrical, tools and kitchens performed well even as same-store sales of garden products fell, CEO Frank Blake said on a conference call.

A colder-than-usual spring eroded demand for outdoor products and kept shoppers away in many parts of the United States. Both chains are up against strong numbers from last year, when a first-time home buyer tax credit and a federal stimulus for energy-efficient appliances boosted demand.

Lower expenses helped Home Depot beat Wall Street estimates on the profit front, prompting it to boost its full-year earnings outlook even as it just backed its sales forecast. Its shares were up about 2 percent at $37.72 on the New York Stock Exchange.

Many other analysts also picked Home Depot over its smaller rival citing better merchandising, advertising, and execution in the key selling season.

Home Depot's consistent television message of low-price leadership and a friendlier shopping experience is leading to market share gain, Wall Street Strategies' Brian Sozzi said.

The home improvement space has yet to experience a real demand recovery but Home Depot is well positioned to see earnings upside when the segment gets stronger, Credit Suisse analyst Gary Balter said.

Fresh data on Tuesday showed that the housing recovery will be slow. U.S. housing starts fell 10.6 percent in April as an overhang of homes on the market discourages builders from taking on new projects.

Strasser kept his neutral rating on Home Depot citing macro concerns.

Both Home Depot and Lowe's have found it harder to sell their wares to homeowners in an uneven U.S. economy. Many shoppers have stayed away from expensive renovations amid falling housing prices.

Home Depot's net income rose to $812 million, or 50 cents a share in the first quarter ended on May 1, from $725 million, or 43 cents a share, a year earlier. Analysts were expecting 49 cents a share, according to Thomson Reuters I/B/E/S.

Sales fell 0.2 percent to $16.82 billion, missing the analysts' average estimate of $17.02 billion.

Sales at Home Depot stores open at least a year fell 0.6 percent, with those at U.S. stores declining 0.7 percent.

Home Depot still expects fiscal-year sales to be up about 2.5 percent. It sees earnings of $2.24 a share, excluding future stock repurchases, up from a prior forecast of $2.20.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn, Dave Zimmerman)