Fast-growing home decor chain raises outlook

At Home reported a strong first quarter, helped by the addition of 23 new stores the chain opened in the past 12 months — and there are more on the way.



At Home's net income in the quarter totaled $10.0 million, compared to $7.3 million in the year-ago period. Net sales jumped 23.1% to $211.8 million in the period ended April 30, from $172.1 million last year. It was the chain's 12th consecutive quarter of 20-plus percent sales growth. Same-store sales rose 5.8%, marking the 13th consecutive quarter of positive same store sales increases.



At Home is moving ahead with expansion. It will open 28 new stores (25 net additions) in 2017.



"It is still early in the year, but we feel very good about our first quarter performance and are raising our top line expectations and the midpoint of our fiscal 2018 EPS outlook," said Lee Bird, chairman and CEO, At Home, which operates 132 stores in 31 states and is headquartered in Plano, Texas.



The retailer raised its fiscal 2018 net sales outlook to $906 million to $913 million, representing growth of 18% to 19%, and increasing the midpoint of its pro forma adjusted EPS range, bringing its outlook to $0.73 to $0.75. "Our top line strength continues to provide us the flexibility to reinvest in compelling long-term opportunities such as brand awareness and direct sourcing as we remain focused on delivering against our short and longer-term operational and financial goals," said CFO Judd Nystrom.



In commenting on At Home's financial results, analyst Neil Saunders, managing director of GlobalData Retail, noted that the chain has room for improvement in key area.



“At Home shops are very functional, and there is limited engagement with shoppers," Saunders said. "Although this is partly a symptom of the big-box nature of the format, this is a lost opportunity in a category like home. An improvement would help the company to draw in more occasional home buyers and increase conversion rates and basket sizes among those consumers in its stores. That said, even without this improvement, we are optimistic about the prospects for At Home."