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At Home Partners With PICKUP, Boosts Omnichannel Offerings

Zacks Equity Research

At Home Group Inc. HOME has expanded its omnichannel capabilities by teaming up with PICKUP, a last-mile logistics service. Amid the coronavirus crisis, this partnership will offer contactless next-day local delivery of a full assortment of home décor and furniture.

This home décor superstore has been developing and testing the pivot phase for omnichannel offerings for over a year. Lee Bird, Chairman and Chief Executive Officer stated, "Home delivery is yet another fantastic example of our team’s ability to act nimbly to serve our customers in new, innovative ways. Our omnichannel offerings leverage the strength of At Home’s existing footprint and in-store inventory to allow our customers to shop however they want."

Currently, customers can order At Home products for delivery from 106 stores, with the service expected to be rolled out to 125 stores, subject to local and state mandates.

Notably, At Home rolled out a buy-online-pickup-in-store pilot to 28 stores this January and has plans to expand to more markets later in 2020. The company has accelerated the expansion of these capabilities to reach more than 100 stores in April, as allowed by local and state mandates. Furthermore, At Home launched curbside pickup at a majority of its locations earlier in March.

Outbreak Dims Near-Term Prospects

The coronavirus outbreak across 192 countries and territories resulted in the closure of many retail stores. The latest U.S. retail sales data for February fell 0.5% from January, registering the largest decline since December 2018. Industry experts are concerned that there might be more hurdles as consumers are restricting purchases to only essential items.

At Home announced temporarily closure of stores in North America. The company has suspended all new store openings and store remodels to overcome the impact of the pandemic. Given the unpredictable effects of the virus on consumer behavior and economic activity in general, the company has decided to temporarily delay its first-quarter and fiscal 2021 guidance.

Notably, the company witnessed negative comps in recent weeks, prior to the temporary store closures. It expects near-term softness as overall consumer demand is likely to decline. Shares of At Home have declined 64.6% so far this year, compared with the 45.6% decline of the industry.

Meanwhile, RH RH, a furniture and housewares company, recently reported fourth-quarter fiscal 2019 results, wherein adjusted earnings beat the Zacks Consensus Estimate but revenues missed the same. Moreover, in view of major disruption in financial markets and retail business operations due to the COVID-19 outbreak, RH withdrew all prior guidance pertaining to fiscal 2020. Additionally, the company will take more steps that comprise deferring new business introductions and capital spending, while reducing costs to navigate through the short-term challenges of this crisis.

The coronavirus-induced situation is getting worse by the day and investors should brace for soft sales numbers in the coming months. That said, various omnichannel capabilities like that of At Home’s are expected to help companies combat the crisis to some extent.

At Home — which shares space with Williams-Sonoma, Inc. WSM, RH and Ethan Allen Interiors Inc. ETH in the Zacks Retail - Home Furnishings industry — currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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