Adds details from call in paragraph 1, 3 and 4, updates shares in paragraph 5, CEO comment in paragraph 11

By Anuja Bharat Mistry

May 20 (Reuters) - Lowe's LOW.N on Wednesday joined larger rival Home Depot HD.N in signaling a squeeze from the subdued U.S. housing market, and said elevated oil prices were fueling higher transportation and input costs.

U.S. consumer sentiment slumped to a record lowin early May and a popular mortgage ​rate rose last month, as the Iran war pushed up oil prices and Treasury yields, piling more pressure on a market already strained by elevated home prices.

Company executives on a post-earnings call said that the impact of rising costs was building in the current quarter without providing further details.

Lowe's estimates about half of the 20% of tariff refunds it received have been used to mitigate the higher fuel costs, CEO Marvin Ellison said on the call.

The company's shares were down about 1% in morning trading.

PRO DEMAND POWERS STRONG QUARTER

Lowe's, which expects the broader market to remain flat this year, retained its target of fiscal 2026 comparable sales of flat to up 2% and adjusted profit per share of between $12.25 and $12.75.

With housing turnover at historic lows, retailers like Lowe's are losing out on a key source of renovation demand, though maintained guidance signals confidence that Pro strength can offset do-it-yourself softness, said Zak Stambor, analyst with eMarketer.

A report from the National Association of Realtors earlier this month showed listed houses were staying longer on the market relative to the ‌same period last year.

Like Home Depot, Lowe's also beat first-quarter sales estimates on steady growth in professional (Pro)-driven categories, particularly in rough plumbing and electrical wiring.

Lowe's has been investing in its Pro segment serving small-to-medium contractors, carpenters and builders by expanding assortments and offering job-site delivery.

"We are operating in a K-shaped economy where the higher income consumers are spending on home upgrades while the lower income consumers are a little bit more cautious and uncertain," Ellison said.

Comparable average ticket for the quarter rose 1.5%, while comparable transactions dipped 0.9%.

Quarterly sales of $23.08 billion beat estimates of $22.97 billion, according to data compiled by LSEG, while adjusted profit of $3.03 per share topped expectations of $2.97.