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At Home (HOME) Adds Four Stores, Boosts Superstore Count

Zacks Equity Research

In order to fortify its presence in the Midwest and Florida, At Home Group Inc. HOME announced the opening of four new stores at Crestwood, IL, Clearwater, FL, Lincoln, NE and Schaumburg, IL.

The recent store openings will take the company’s total store count to 209 locations, across 39 states. Based on a warehouse model, At Home superstores offer more than 50,000 diversified on-trend home products, for every room, style and budget.

Store Expansion Strategy on Track

At Home mainly focuses on expanding opportunities in both existing and new markets in the United States. The company believes that it has the potential to expand the store count to at least 600 stores in the United States.

The home décor superstore opened 11 new stores in the fiscal first quarter and 13 in second-quarter fiscal 2020. The company anticipates opening 12 gross and nine net new stores during the third quarter. Moreover, in fiscal 2020, it expects to open 32 net new stores and projects store base compound annual growth rate of 15-20%.

Backed by these efforts, At Home is likely to drive its top line. In the fiscal second quarter, total sales grew 19% driven by 24% year-over-year store growth, marking the 22nd consecutive quarter of high-teens improvement. The company’s net sales also surpassed the Zacks Consensus Estimate in 11 of the trailing 13 quarters. It expects fiscal 2020 total net sales in the $1.37-$1.39 billion range, indicating 18-19% growth year over year.

Additionally, At Home is expected to generate more revenues going forward, courtesy of continuous superstore expansion based on optimization of marketing strategies, growing brand awareness and team member execution.

At Home is also well-positioned for growth in the upcoming quarters as well, as it has already pipelined a substantial portion of superstore for fiscal 2020.

Meanwhile, shares of At Home have gained 22.6% compared with its industry’s 13.8% rally in the past three months.

Zacks Rank & Key Picks

At Home currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Retail-Wholesale sector are RH RH, Tempur Sealy International, Inc. TPX and Williams-Sonoma, Inc. WSM. While RH sports a Zacks Rank #1 (Strong Buy), Tempur and Williams-Sonoma carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

RH and Tempur have an impressive long-term earnings growth rate of 12.5% and 15%, respectively.

Williams has an average four-quarter earnings surprise of 7.9%.

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