Now that both major home-improvement retailers have posted results for the pandemic quarter, investors are left to ponder: How did Lowe’s Cos. outperform Home Depot Inc. by so much?

Regional strength played a major role. For years, investors have lamented that Lowe’s had fewer stores in cities. For example, it doesn’t have a store in Manhattan, while Home Depot does.

But that helped Lowe’s as metro areas faced stiffer social-distancing policies and infections. About a quarter of Lowe’s locations are in rural areas, where sales outperformed the company average. Revenue gains were softer in cities, home to only 10 per cent of its locations.

Being “further out from the major metros worked in their favor this quarter,” RBC analyst Scot Ciccarelli said in a research note. Businesses outside cities were less impacted, he said.

In the first quarter, Lowe’s boosted same-store sales 11 per cent, its biggest increase since 2003, in crushing the average analyst estimate of 4 per cent. Home Depot posted a gain of 6.4 per cent, which also topped estimates.

Lowe’s shares rose as much as 5 per cent in New York trading on Wednesday. Home Depot gained as much as 1.8 per cent, after a decline Tuesday of 3 per cent following its earnings release.

Chief Executive Officer Marvin Ellison, a former Home Depot executive, also said that its business with contractors, what it calls the pro division, wasn’t hit as hard as expected.

The bulk of its pro customers are small businesses that could shift to outdoor work and do less major home renovations that were delayed or canceled because many people don’t want workers in their homes during the pandemic. Lowe’s also generates fewer sales from contractors than Home Depot.

While these advantages were helpful, they shouldn’t take away from the improvements Lowe’s has made, Ciccarelli said. Ellison has been revamping the company’s operations since joining in 2018. He’s also sold off assets and closed weak-performing stores.

The company has been making progress over the past year, but Ellison didn’t have a standout quarter to show Wall Street that the chain has really made a leap. And now, it appears, he does.

“Lowe’s has had a couple of choppy quarters over the past few years,” Simeon Gutman, an analyst for Morgan Stanley, said in a research note. “It is encouraging to see what appears to be clean out-performance in a period with so much disruption.”