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Lowe's reported great earnings today. Stephen D. Simpson looks at the battle between Lowe's and Home Depot:

For those who would suggest that home improvement retailing ultimately has to be like The Highlander ("in the end, there can be only one..."), I'd observe that Wal-Mart and Target have profitably co-existed, as well as Office Depot, Staples, Wal-Mart's Sam's Club, and Costco.

All that said, it's clearly true that Lowe's is the pluckier and faster-growing of the two concepts. Sales in the fourth quarter climbed over 26% (nearly 8% on a comp-store basis), and earnings per share rose nearly 36%. Certainly those numbers outstrip what Home Depot managed to accomplish.

And there are certainly aspects of Lowe's model that could be seen as working better than Home Depot's. Lowe's is generally thought to have better customer service, and the notion of trying out metro/urban stores is interesting.

By the way, Home Depot still has superior returns on capital. Home Depot also has a leg up in terms of international expansion and is moving aggressively into service businesses and MRO/industrial supply. So in this Fool's opinion, comparing Home Depot and Lowe's is no longer a fair straight-away comparison.

Posted by edelfenbein at February 27, 2006 2:19 PM