At Home reported a strong second quarter as consumers continued to spend time and money on decorating and organizing their homes – a trend the retailer sees persisting for some time to come.
“As a home decor category killer, we remain well-positioned to capitalize on this trend,” chairman and CEO Lee Bird told analysts on the company’s earnings call. “A large store format and self-service model, which makes it easier to practice safe social distancing remains a key competitive advantage for us, especially at a time when customers are concerned about the coronavirus resurgence.”
The value home furnishings retailer’s net sales increased 50.5% to $515.2 million in the quarter ended July 25, driven by 42.3% increase in comparable store sales and a net increase (15) in open stores. The increase in comparable sales was fueled by strong demand as stores reopened, the company said.
Net income was $89.4 million, or $1.39 per share, compared to $10.4 million, or $0.16 per share, in the year-ago quarter. Adjusted net income was $90.6, or $1.41 share, million compared to $11.4 million, or $0.19 per share, in the same period last year.
“We delivered the best quarter in the company’s history in terms of comparable store sales, profitability and free cash flow, as well as our lowest leverage ratio since our IPO,” stated Bird. “Our revised long-term strategy put in place last year is yielding positive results this year, and we believe it will continue to propel us going forward. In addition, the recent completion of our debt refinancing provides us financial flexibility, addresses a key investor concern, and along with strong results, puts us in our best financial shape since going public four years ago.”
Bird said that the third quarter has started off “exceptionally well,” with quarter-to-date comparable store sales relatively in line with the second quarter “as we continue to gain market share.”