Homely But Lovable

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If only this were a sexy tech like Google (Nasdaq: GOOG). Record earnings coupled with increased guidance is usually the kind of thing that gets investors' engines revving. Not so with frumpy, old, tough-to-look-at Home Depot (NYSE: HD), especially not today.

Today's third-quarter numbers may not have impressed the Street, which is dropping the stock a couple percent on an overall red number day, but there's plenty for Foolish holders to love. Revenues were up 13% over the same quarter last year, and earnings per share -- thanks in part to a dwindling pool of shares -- rose 20% to $0.60 per stub. But it's not all Peaches and Herb: Selling costs rose 1.8% as a portion of revenue. Keep an eye on these numbers.

But back to the sunny side of the street. There are a few key numbers driving the steady progress. Comps growth of 4.5% doesn't sound like the high-octane results at certain specialty retailers these days, but it's healthy in comparison to other major retailers such as Target and Wal-Mart. Mull this over: The average customer was spending 6.6% more per trip at Home Depot, more than $55 per head.

Service revenue is a sleeper no more. After another big gain -- 26% -- the $957 million represents a full 5% of revenues and is growing at twice the rate of overall sales. Wait, there's more. Speaking of the city, the firm is moving onto increasingly urban turf with smaller, more focused stores.

When you realize that comps growth at the firms' dozens of Mexican stores is growing in the double digits, you realize that there are plenty of reasons to believe that Home Depot can continue to come up with solid sales growth.

In seeing a bright future, Home Depot's management echoed the outlook at competitor Lowe's (NYSE: LOW). Although there's often a tendency for investors to make a choice between two similar competitors -- Sirius Satellite Radio (Nasdaq: SIRI) vs. XM Satellite Radio (Nasdaq: XMSR), eBay (Nasdaq: EBAY) vs. Overstock.com (Nasdaq: OSTK) -- the beauty of the market is that you can have it both ways. Buy 'em all! Though Home Depot's been a better performer this year, there's little reason to doubt that both these behemoths will continue to perform.

For related Foolishness:

• Should you be hoarding Home Depot?
• Read all about Lowe's optimistic outlook.
• Review the retail rollout.
• Home Depot goes downtown.

Regressing apartment dweller Seth Jayson liked his home, and admires Home Depot, but doesn't miss spending a few hundred bucks on repair goods every month. At the time of publication, he had no positions in any company mentioned. View his stock holdings and Fool profile here. Fool rules are here.