At Home’s Q3 Sales Rose 25.5% and Beat Estimates



Quarterly numbers

At Home Group (HOME) reported third quarter of fiscal 2019 sales of $267.2 million, which easily beat the consensus expectation of $265.4 million. Sales rose 25.5% on a YoY basis. At Home has beaten sales estimates in two quarters and missed them in one quarter of fiscal 2019. However, on a year-over-year basis, sales have risen in double digits in all three quarters of fiscal 2019.

Sales growth was mainly driven by new store openings. As of October 27, the company operated 173 stores across 36 states. In the third quarter of fiscal 2019, At Home opened eight new stores. For fiscal 2019, the company plans to open a total of 31 net new stores.

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At Home considers new store growth to be conducive to top-line growth and cash flows. Over the long term, it anticipates having the potential to open 600 stores across the United States. Management added that it continues to prefer second-generation retail sites. Currently, there is a high supply of second-generation retail sites due to the disruption of the retail sector. For fiscal 2020, management has stated that out of the total sites acquired, 80% will be second generation sites.

At Home has left its fiscal 2019 sales guidance unchanged. For fiscal 2019, its sales are expected to be in the range of $1.159 billion–$1.164 billion. For the fourth quarter of fiscal 2019, sales are forecast to be $347 million–$352 million. The company anticipates opening seven net new stores in the holiday quarter.

Comps performance

At Home’s third-quarter comps rose 5.2% compared to their 7.1% increase in the fiscal third quarter of 2018. Management added that comps across all regions were strong. Also, the seasonal category was starting to pick up due to the onset of the holiday season.

However, management added that initial comps in the fourth quarter were soft, but they have since improved. Still, because of the earlier softness, comps are now anticipated to be in the range of 2.2% to 2.5% versus the earlier guided range of 3.0% to 3.5%.


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