HD vs. LOW: tale of the Q3 tape

For the third consecutive quarter, Lowe's comps exceeded Home Depot comps. But determining a head-to-head third quarter winner is complicated by several other metrics, including total sales, where, Home Depot maintained its dominance.

An interesting statistic that emerged from the Home Depot third quarter earnings call: the Atlanta-based giant improved its business by $15 billion in the first three quarters of the year -- that's larger than the total annual sales of any competitor other than Lowe's.

Here's the head-to-head sales chart: 

The simple, bottom line, third-quarter net income comparison looks like this;

• Home Depot net income of $3.432 billion, up 23.9% from $$2.769 billion in the same quarter last year.

• Lowe's net income income of $692 million is down from $1.049 billion in the same quarter last year. 

However, Lowe's net income decline resulted as the company took advantage of favorable interest rates to reduce its long term interest expenses. CFO David Denton explained the company recognized a loss of $1.1 billon on the extinguishment of debt. 

Here are some of the other head-to-head numbers from the third quarter:

Store count at the end of the quarter
HD: 2,295
LOW: 1,969

eCommerce sales growth
HD: Described sales that "leverage one of our digital platforms" up 80% over the same quarter a year ago. About 60% of orders were fulfilled through a store.
LOW: Lowes.com sales increased 106%. 

Transaction growth
HD: 13%
LOW: 16%

Comp average ticket growth:
HD: 10%
LOW: 13.7%

COVID-related expenses - employee benefits
HD: $355 million
LOW: $230 million

COVID-related expenses - operations/safety
HD: $60 million
LOW: $55 million

Both companies described DIY sales running ahead of Pro sales in the quarter.

Lowe's CEO Marvin Ellison described a shifting consumer mindset that's propelling sales. Customers "took steps to shift their home to serve three primary purposes: a home school, a home office, and their primary location for recreation and entertainment." This mindset bodes well for Lowe's sales, he said.

Home Depot CEO Craig Menear offered a similar overarching analysis. "Our results through the first nine months of the year clearly indicate that for many customers, the home has never been more important," he said. "And we hear from them that they will continue to invest in home improvement through a multitude of different projects and plan to embrace the upcoming holiday season."