It seems like a fuzzy memory now, but Lowe's (NYSE:LOW) was once seen as the superior operator to Home Depot (NYSE:HD)
on the big-box home improvement battleground. Times have definitely
changed, though, as Home Depot has gained an edge not only with its
store locations (more stores in or near urban centers), but also with
its merchandising. Making matters worse, Home Depot has significantly
closed the gap (if not leapfrogged) Lowe's in an area where Lowe's once
dominated – back-office logistics and cost management.
Even if Home Depot has been operationally de-pantsing Lowe's recently,
it doesn't show up in the stocks over the last year – they both have
nearly equal 60%-plus gains to their credit. Look at the two-year,
five-year, or 10-year comparisons, though, and you see a wide gap
between the performance of Home Depot and Lowe's (in favor of Home
Depot). While there is a lot that Lowe's could do to close the gap and
be a relative out-performer, the real question has to be “will they?”
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