|
Related Topics
|
Category: Stock Market and At Home Group
Date: 19 June 2020 Stock Price: $7.71 We take a look at the 1st quarter earnings for their 2021 fiscal year of At Home Group, the home decor superstore group. The group saw a -38% decline in their sales in the last 12 months largely due to the Covid-19 pandemic which saw stay at home orders and lockdowns across the United States.
|
- Over the last few months, our team has risen to the challenge and focused on prioritizing the health and safety of our team members, customers, and communities. "
About At Home Group
At Home is the home décor superstore with more than 200 large format stores that we believe dedicate more space per store to home décor than any other player in the industry. We are focused on providing the broadest assortment of products to suit every room, in every style, for every budget. We utilize our space advantage to out-assort our competition, offering more than 50,000 unique items across broad product categories including furniture, garden, home textiles, housewares, patio, rugs, seasonal décor, tabletop décor and wall décor.
Our differentiated merchandising strategy allows us to identify trends in the marketplace and then value-engineer products to provide desirable aesthetics at attractive price points for our customers. The majority of our products are unbranded, private label or specifically designed for us. We believe that our broad and comprehensive offering and compelling value proposition combine to create a leading destination for home décor with the opportunity to continue taking market share in a large and highly fragmented industry.
Our differentiated merchandising strategy allows us to identify trends in the marketplace and then value-engineer products to provide desirable aesthetics at attractive price points for our customers. The majority of our products are unbranded, private label or specifically designed for us. We believe that our broad and comprehensive offering and compelling value proposition combine to create a leading destination for home décor with the opportunity to continue taking market share in a large and highly fragmented industry.
Overview of At Home Group's 1st quarter 2021 earnings report
The numbers we are interested in (for the quarter):
- Net sales: $189.846 million (down from $306.264 million from the same quarter of the previous year)
- Net sales decreased by -38% over the last 12 months
- Cost of sales : $173.496 million (down from $218.213 million for the same quarter of the previous year)
- Cost of sales decreased by -20.5% over the last 12 months
- Net loss: -$358.942 million (down from from $13.883 million for the same quarter of the previous year)
- Diluted loss per share: -$5.60 (down from -$0.21 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 64.130 million (down from 65.8151 million for the same quarter of the previous year)
- PE ratio of At Home: Since the group is loss making we cannot calculate a PE ratio
- Cash and cash equivalents: $43.640 million
- Cash and cash equivalents per share: $0.68
- Cash and cash equivalents makes up 8.7% of At Home Group's current market capital
- Cash and cash equivalents makes up 1.8% of At Home Group's total assets
- Inventories: $406.972 million
- Inventories makes up 16.5% of At Home Group's total assets
- Total stockholders' equity of At Home Group: $251.761 million
- Stockholders' equity per share: $3.92
- So At Home (HOME) is trading at 1.98 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms tend to trade at
- The average price to book value of firms in the S&P 500 is 3.7
Management commentary on their 1st quarter 2021 earnings report
PLANO, Texas--(BUSINESS WIRE)-- At Home Group Inc. (NYSE: HOME), the home décor superstore, today announced its financial results for its first quarter ended April 25, 2020.
Lee Bird, Chairman and Chief Executive Officer, stated, “Over the last few months, our team has risen to the challenge and focused on prioritizing the health and safety of our team members, customers, and communities. We have focused on preserving liquidity, enhancing financial flexibility, and ensuring At Home can thrive going forward. Prior to the onset of COVID-19, we had seen an improvement in comparable store sales trends. However, as the pandemic escalated and we temporarily closed our stores, sales were materially impacted."
Lee Bird, Chairman and Chief Executive Officer, stated, “Over the last few months, our team has risen to the challenge and focused on prioritizing the health and safety of our team members, customers, and communities. We have focused on preserving liquidity, enhancing financial flexibility, and ensuring At Home can thrive going forward. Prior to the onset of COVID-19, we had seen an improvement in comparable store sales trends. However, as the pandemic escalated and we temporarily closed our stores, sales were materially impacted."
Mr. Bird continued, “We acted quickly and deliberately to continue serving our customers during a time when they are spending more time at home than ever and to provide them with safe and convenient ways to shop with us. Since early May, as local and state mandates were lifted, we began reopening a majority of our stores. Early results are strong across all markets with initial sales in reopened stores up solid double-digits during their reopening period quarter-to-date. As the low-price leader in our category with a focus on expanding our omnichannel presence, I am confident that At Home is well positioned for both the near and long-term to take additional share of the large and fragmented home furnishings market.”
Balance Sheet Highlights as of April 25, 2020
Subsequent Events
Outlook & Key Assumptions
Given the unprecedented and continued uncertainty related to COVID-19, the Company is not providing second quarter and fiscal year 2021 guidance at this time.
Balance Sheet Highlights as of April 25, 2020
- Net inventories decreased 0.3% to $407.0 million from $408.0 million as of April 27, 2019 primarily due to reduced inventory purchases in response to the COVID-19 pandemic, partially offset by a 14.1% increase in the number of stores.
- Total cash was $43.6 million and borrowings available under our ABL facility was $44.1 million; however, our ability to incur additional borrowings would have been limited by $38.7 million due to the consolidated fixed charge coverage ratio described in our Quarterly Report on Form 10-Q for the thirteen weeks ended April 25, 2020 in “—Liquidity and Capital Resources.” As of June 16, 2020, our estimated total liquidity was more than $200 million.
- Long-term debt was $334.2 million compared to $336.8 million as of April 27, 2019. Additionally, there was $342.0 million outstanding under our ABL facility as of April 25, 2020 compared to $228.0 million as of April 27, 2019. Increased borrowings were primarily driven by a net increase of 27 new stores year-over-year as well as our decision to draw an additional $55 million under our ABL facility during the quarter as a precautionary measure to provide more financial flexibility and maintain liquidity in response to the COVID-19 pandemic.
Subsequent Events
- On June 12, 2020, we amended our ABL facility to provide for a new tranche of term loans in a principal amount of $35.0 million on a “first-in, last out” basis, subject to a borrowing base, the net proceeds of which were used to repay a portion of the outstanding revolving credit loans on that date. Guggenheim Securities, LLC served as our financial advisor.
Outlook & Key Assumptions
Given the unprecedented and continued uncertainty related to COVID-19, the Company is not providing second quarter and fiscal year 2021 guidance at this time.
At Home Group (NYSE: HOME) stock price history
The image below, obtained from Google shows At Home Group (NYSE: HOME) stock price since their listing in August 2016. And its not been a very good time for At Home stockholders. At listing the stock was trading at $15.30 and its currently trading at $7.77. Thats a loss of -% suffered by At Home stockholders since their listing.
The stock of At Home is trading at a lot closer to its 52 week high of $10.55 than it is to its 52 week low of $1.20, which to us is a clear indication that the short term sentiment and momentum of At Home (HOME) stock is positive at this point in time.
The stock of At Home is trading at a lot closer to its 52 week high of $10.55 than it is to its 52 week low of $1.20, which to us is a clear indication that the short term sentiment and momentum of At Home (HOME) stock is positive at this point in time.
Recent coverage of At Home (HOME)
The extract below covers the latest from At Home as obtained from Fool.com
What happened
Shares of At Home (NYSE:HOME) surged today, finishing up 13.5% after a Wall Street analyst released a bullish research note on home-furnishing retailers. Separately, investors were also encouraged by fresh retail sales data released by the Commerce Department.
So what
Jefferies boosted its price targets on numerous home improvement and home-furnishing companies, including Lowe's, Home Depot, and Wayfair. The firm believes that the broad shift to remote work that COVID-19 is spurring may translate into a large number of people moving from urban cities to suburban areas, boosting homeownership in 2021. Those new homeowners are then expected to start buying more products to furnish those homes, particularly as homeowners tend to spend more on big-ticket purchases like appliances than renters. While At Home is not mentioned specifically in the research note to investors, the company would clearly benefit from those trends.
Read the full article here
What happened
Shares of At Home (NYSE:HOME) surged today, finishing up 13.5% after a Wall Street analyst released a bullish research note on home-furnishing retailers. Separately, investors were also encouraged by fresh retail sales data released by the Commerce Department.
So what
Jefferies boosted its price targets on numerous home improvement and home-furnishing companies, including Lowe's, Home Depot, and Wayfair. The firm believes that the broad shift to remote work that COVID-19 is spurring may translate into a large number of people moving from urban cities to suburban areas, boosting homeownership in 2021. Those new homeowners are then expected to start buying more products to furnish those homes, particularly as homeowners tend to spend more on big-ticket purchases like appliances than renters. While At Home is not mentioned specifically in the research note to investors, the company would clearly benefit from those trends.
Read the full article here
At Home Group (NYSE: HOME) latest stock valuation
So has the market been to harsh on At Home Group's stock price in recent times, or does their current financial results warrant the current stock price levels? Based on their latest earnings report as well as the fiscal guidance, our stock valuation models place a target price (full value price) on At Home Group of $12.30. So we do believe the stock is undervalued at its current price and would expect the stock to trend upwards once sentiment towards the group reverses a bit.
Next earnings release of At Home
It is expected that At Home will release their 2nd quarter 2021 earnings report in early September 2020