Home Depot Inc (HD.N) the No. 1 U.S. home improvement chain, reported higher-than-expected quarterly profit and same-store sales, driven by increased customer traffic and more average spending at its stores amid a strong housing market.

Sales at stores open for more than a year rose 5.5 per cent, above the 3.9 per cent growth expected by analysts polled by research firm Consensus Metrix. Comparable sales at U.S. stores rose 6 per cent, Home Depot said on Tuesday.

Home Depot and smaller rival Lowe's Cos Inc have remained a bright spot in the retail sector as a firming economy and higher wages are driving new home sales and an increase in the value of existing houses has spurred remodeling activity by homeowners.

Retail sales rose 0.4 per cent last month after an upwardly revised 0.1 per cent gain in March, helped by hefty gains in sales of building material, according to the U.S. Department of Commerce.

This is in contrast to falling sales at department stores such as Macy's Inc and J.C. Penney Co Inc, which are suffering from lower spending on apparel and growing competition from online and off-price retailers.

Home Depot's net income rose to $2.01 billion, or $1.67 per hare, in the first quarter ended April 30, from $1.80 billion, or $1.44 per share, a year earlier.

Net sales rose 5 per cent to $23.89 billion.

Analysts on average had expected earnings of $1.62 per share on revenue of $23.76 billion, according to Thomson Reuters I/B/E/S.

Home Depot's shares were up 1.7 per cent at $160 in premarket trading on Tuesday.

The company also raised its earnings forecast for the year ending January 2018 to $7.15 per share from $7.13, citing anticipated share repurchases.