Home Depot vs Lowes

Table 2 provides comparisons of HD and Lowes total debt (short term & long term) plus available cash. Lowes maintains less short term debt and available cash versus HD. Lowes cash reserves is about 10 times its short term debts whereas HD maintains approximately 2 times.

Financially, Home Depot has had a strong fiscal year with “ reported sales of $24.9 billion for the second quarter of fiscal 2015, a 4.3 percent increase from the second quarter 2014” (The Home

Home Depot is the fastest growing retailer in the U.S. by some accounts. It has a fascinating history of innovation and entrepreneurship. The company had some difficulties in the mid-2000s that some attribute to cultural clashes. However, during this period the company was able to take full advantage of the housing boom. Yet when the bubble burst, Home Depot was forced to claim substantial losses. Despite these loses Home Depot has weathered the storm fairly well and is in prime position to take advantage of an economic recovery; if it ever comes.

Established as the older company of the two, Lowe’s ranks forty-second as a Fortune 500 company. Established in 1946 as a small hardware business, Lowe’s has grown into a 40,000 product, global market enterprise that consist of 1,710 stores nationwide expanding into the countries of Canada, Mexico and Australia (Lowe's Internal, 2010) Home Depot, founded in 1978, is the fastest growing retailer in the United States. Ranked twenty-ninth as a Fortune 500 company, Home Depot continues to remain the number one do-it-yourself retail store in America. These two companies may sell products of the same nature, but comparing their Code of Ethics is their way of setting themselves apart. (Home Depot Internal, 2009)

Lowe’s Company has been in business for over 60 years. The company is the second largest home improvement retailer in the world and employs more than 215,000 employees. The company’s home base is Mooresville, North Carolina. Standard & Poor ranks Lowe’s as #48 . Presently, Lowe’s stock, which is identified on the New York Stock Exchange as LOW, is selling for right under $20 a share. This price has been consistent and is comparable to their biggest competitor Home Depot, Inc whose stock has remained steady at $23.

While Lowes and Home Depot follow similar differentiation and low cost strategies, there are a few differences in marketing due to the fact that Lowes seems to be more targeted towards women with bright and colorful displays, wide aisles and product stacking that is lower and easier to reach (Clemons, 2012). While this is a calculated decision because women make 80% of home improvement decisions, it may distract from growth in the contractor business since the vast majority of home improvement professionals are men. The advantage shifts toward Home Depot since men also spend thirty five percent more than women on home improvement supplies therefore, attracting men may actually be more efficient in terms of return of investment (Goodfellow, 2013). The ability to quickly locate products and return to work is a tremendous advantage for contractors who would prefer to be on the job instead of leisurely strolling the aisles of a store while examining multitudes of options. This may be a major component of Home Depot’s rebound since they derive a larger percentage of their sales from professionals and the rebounding housing markets and rebuilding efforts from Hurricane Sandy have introduced significant cash flow into the industry (Cheng, 2013).

The two organizations in the same industry that will be compared and contrasted are The Home Depot and Lowe’s. The Home Depot and Lowe’s are both clearly success stories, with 4,000 stores between them.

This ratio is similar to ROA except that it shows only the return on the resource contributed by the shareholders. Home Depot maintained steady ratio the last two years while Lowe’s has been decreasing over the past three years.

The Home Depot (NYSE: HD) is a home improvement, construction products and services retailer operating over 2,000 big-box stores in the United States and abroad. The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank with the vision of one-stop shopping for do-it-yourself (DIY) customers, installation services for do-it-for-me (DIFM) customers and competitive products for the professional market. Their DIFM installation programs include products such as carpeting, flooring, cabinets, countertops, and water heaters. In addition, the company provides installation of various professional products like generators and HVAC systems.

Organizational overviewBeginning in 1978, The Home Depot was founded by Bernie Marcus and Arthur Blank. , the founders' vision of one-stop shopping for the do-it-yourselfer came to fruition with the help of investment banker Ken Langone and merchandising guru Pat Farrah. The first two Home Depot stores opened on June 22,

$66.2 billion and $47.2 billion, respectively, which means Home Depot's returns were approximately $5.3 billion

Looking forward, Lowe’s plans include expansion, with more than 100 store openings in line until the year 2004. Although it was not explicitly stated that it will continue to expand until 2006, the analysts assumed the contrary, that is a continuous expansion in order to strategize and reach Home Depot’s level in terms of scale.

This paper gives the reader an insight into how a manager in a competitive industry in a two-firm constant sum game makes decisions. The writer will be playing the role of a Home Depot, Inc. manager, and the major competitor is Lowe’s, Inc. Home Depot is the largest United States (U.S.) home-improvement retailer while Lowe’s is the second-largest U.S. home-improvement retailer. This is significant because what one company does affects the other. To compare the two companies their company profiles were reviewed. The latest news headlines on both companies were

In major markets, Home Depot and Lowes are bitter rivals, mainly in the DIY sector. Lowes and Home Depot are similar with what they offer and both have large warehouse stores. The other smaller competitors like True Value, Ace Hardware, and Hughes Supply are not even close when it comes to what Lowes or Home Depot are accomplishing. The biggest threat that faces Lowes now is that Home Depot has been training with a Chinese retailer and bought the store. Now Home Depot has a foothold in a growing Chinese market.

Home Depot utilized its assets with better efficiency to generate revenues in all three years than Hechinger Company. The higher asset turnover demonstrated Home Depot’s ability in resources control. Home Depot’s financial leverage increased more than 50% from 1984 to 1985, but outperformed Hechinger in 1984 and 1985. It borrowed more debt to support its expansion plan. There were minimal differences for average tax rate between Hechinger and Home Depot in 1983 and 1984. However, Home Depot had a much lower effective tax rate in 1985. Due to the fact that Home Depot did not pay cash dividends, Home Depot’s sustainable growth rate equaled its ROE, which decreased through the years due to the drop in earning and increased