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At Home Group Stock and Its Performance This Year

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Stock price marginally down

As of September 26, At Home Group (HOME) stock has fallen marginally YTD (year-to-date). The stock is currently trading at $30.29 compared to $30.39 at the beginning of the year. In 2017, it rose 107.7%.

In comparison, RH (RH), Williams Sonoma (WSM), and Home Depot (HD) rose 27.6%, 9.5%, and 56.9%, respectively, YTD. Pier 1 Imports (PIR) has fallen 63.8% YTD.

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Challenges and opportunities for At Home

At Home Group has been witnessing rising expenses, mainly due to store openings and advertising spending. For fiscal 2019, the company expects to increase its advertising spending to ~3% of overall sales. With the growing number of online retailers, the competition is getting fierce.

The company has been resorting to direct sourcing from vendors to reduce costs. Despite the higher costs, At Home is rapidly increasing its store footprint across the United States, which is driving its top-line growth. The company recently opened a new superstore in Elmhurst, Illinois. It is the 168th At Home store in the country.

For fiscal 2019, At Home has projected 31 net new stores. In the first and second quarters of fiscal 2019, it opened nine net new stores. It expects to open eight to ten new stores in the third quarter of fiscal 2019. Over the long term, it sees a possibility of 600 domestic stores.

One of the biggest driving factors for At Home is its large assortment. Typically, At Home stores have ~50,000 SKUs (stock keeping units) comprised of accent furniture, mirrors, patio cushions, garden and outdoor décor, home organization, and vases. The low-value proposition is another attractive factor for At Home customers. At Home has a low average selling price of ~$15. The average basket cost is ~$65.

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