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At Home (HOME) Q1 Earnings & Revenues Top Estimates, Rise Y/Y

·4 min read

At Home Group Inc. HOME reported first-quarter fiscal 2022 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Moreover, the top and the bottom line grew significantly on a year-over-year basis.

Following the announcement, shares of the company jumped 0.8% during the trading hours on Jun 3.

Inside the Headlines

The company reported adjusted earnings per share of 87 cents, which surpassed the consensus estimate of 61 cents by 42.6%. Moreover, earnings improved significantly from the year-ago loss of 61 cents.

During the fiscal first quarter, net sales of $537.1 million surpassed the consensus mark of $465.4 million by 15.4%. The figure also improved 182.9% from $189.8 million generated in the prior-year quarter. The upside was driven by a 187.3% improvement in comparable store sales or comps and 3.7% net increase in stores. Strong demand and strategic initiatives helped drive comps.

Operating Highlights

Gross margin of 37.3% expanded 2,870 basis points (bps) from the year-ago figure of 8.6%, backed by product margin expansion, lower occupancy costs, depreciation expenses and distribution center costs. Adjusted selling, general and administrative expenses — as a percentage of net sales — contracted 1,480 bps year over year to 20.2%. This was mainly due to expense leverage as a result of higher sales.

Adjusted operating margin significantly increased to 16.8% from the prior-year level of negative 27.6% owing to the above-mentioned tailwinds. During the fiscal first quarter, adjusted EBITDA came in at $110.6 million against a loss of $14.6 million a year ago, reflecting substantial growth.

At the end of the fiscal first quarter, the company had 226 stores in 40 states. Out of these, eight net new stores were opened since the first quarter of fiscal 2021.

At Home Group Inc. Price, Consensus and EPS Surprise

At Home Group Inc. Price, Consensus and EPS Surprise
At Home Group Inc. Price, Consensus and EPS Surprise

At Home Group Inc. price-consensus-eps-surprise-chart | At Home Group Inc. Quote

Financials

As of May 1, 2021, At Home reported cash and cash equivalents of $150.5 million compared with $125.8 million at fiscal 2021-end. Inventories were down 1.2% at the end of the reported quarter to $369 million from $364.5 million at fiscal 2021-end.

Long-term debt was $308.6 million at the end of first-quarter fiscal 2022 compared with $314.3 million at fiscal 2020-end.

Net cash provided by operating activities was $77.8 million for fiscal first-quarter 2022 against $55.2 million cash used operating activities at first-quarter 2021-end. As of May 1, 2021, it had total liquidity of $475.7 million (cash of $150.5 million plus $325.2 million in borrowings available under the ABL facility).

Zacks Rank & Other Key Picks

At Home currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few other top-ranked stocks in the same space are Haverty Furniture Companies, Inc. HVT, Tempur Sealy International, Inc. TPX and Fortune Brands Home & Security, Inc. FBHS. Haverty Furniture sports a Zacks Rank #1, while Tempur Sealy and Fortune Brands carry a Zacks Rank #2.

Haverty Furniture and Fortune Brands’ 2021 earnings are expected to surge 113.8% and 31.3%, respectively.

Tempur Sealy has a three-to-five year earnings per share growth rate expectation of 18.7%.

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