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Evaluating At Home’s Bottom-Line Performance

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Dec. 4 2020, Updated 3:53 p.m. ET

Recent bottom-line numbers are impressive

In the trailing four quarters, At Home Group (HOME) has beaten analysts’ estimate for its bottom line while reflecting robust growth YoY (year-over-year).

For the fiscal first quarter of 2019, At Home Group generated adjusted EPS of $0.31, which was 16.1% better than analysts’ estimate. Adjusted EPS for the quarter rose 63.2% YoY. On a reported basis, EPS was $0.28, up 75%. Higher sales and a lower provision for income tax led to impressive bottom-line numbers despite higher expenses.

For the second quarter of fiscal 2019, At Home’s management expects pro forma adjusted net income of $20.8 million–$21.8 million and adjusted EPS of $0.32–$0.33. Analysts expect the company to report adjusted EPS of $0.33, reflecting a growth of 83.3%.

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For fiscal 2019, management expects adjusted net income of $82.5 million–$85.5 million and adjusted EPS of $1.25–$1.30. The company has projected a tax rate benefit of 850 basis points from stock option exercises for the current fiscal year. For fiscal 2019, analysts expect adjusted EPS to be $1.30, representing a YoY growth of 38.3%.

Cash position

As of April 28, the company’s cash and cash equivalent stood at $13.5 million compared to $10.6 million as of April 27, 2017. Long-term debt was $289.4 million, which was a bit lower than $299.4 million. At Home generated cash flow from operations of $6.7 million in the first fiscal quarter. The company’s inventory rose 12.3% to $283.2 million.

For fiscal 2019, capex (net of approximately $110 million of assumed sale-leaseback proceeds) is expected to be $170 million–$190 million.

Peer performance

For Restoration Hardware (RH), Wall Street’s consensus adjusted EPS estimate for the second fiscal quarter of 2019 stands at $1.75, reflecting twofold growth YoY. For Williams-Sonoma, (WSM), Wall Street’s consensus adjusted EPS estimate for the second fiscal quarter of 2018 stands at $0.69, reflecting a 13.1% growth YoY.

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