At Home in strong Q3; to ramp up store expansion

At Home Group reported its highest comps and best third-quarter performance since going public in 2016 as consumers continue to spend on decorating and organizing their homes amid the pandemic.

The value home furnishings retailer also remains committed to brick-and-mortar expansion. Chairman and CEO Lee Bird told analysts on the company’s earnings call that At Home now expects to open 12 to 15 stores next year, higher than prior plans that called for seven to 10 stores. 

Long-term, the company sees the potential for 600-plus stores, he added, which is nearly three times larger than its current footprint. (At Home ended the quarter with 219 stores in 40 states.)

“As I look beyond next year, I could not be more excited about our ability to capture the opportunity that lies in front of us,” Bird said on the call, adding that the company operates in a highly fragmented industry that is approaching $200 billion and expected to grow annually at a low single-digit rate. 

“For the past many years we have been growing at a much faster pace than the industry and picking up market share,” he said. “This has been especially true this year. Our long-term goal is to continue to expand our market share significantly. “

Bird also noted that the company’s real estate opportunities are “only getting stronger.”

At Home’s net income totaled $47.1 million for the quarter ended Oct. 24, compared to a $14.6 million net loss in the year-ago period.  Earnings per share were $0.71, beating Street estimates of $0.63.

Net sales increased 47.5% to $470 million, compared to analysts’ estimate of $469.77 million. Same-store sales rose 44.1%. 

“We not only delivered record comps of 44% in the third quarter, but also generated strong earnings flow through as well as excellent free cash flow,” Bird stated in the earnings release. “Our leverage ratio of 0.9x is our lowest ever as a public company and reflects continued strength in our business and the significant transformation of our balance sheet. Our inventory position is improving meaningfully, and fourth-quarter performance to date has remained strong as our customers continue to find joy in refreshing their homes and decorating for the holidays.”