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Category: Stock Market and At Home Group
Date: 2 September 2020 Stock Price of At Home Group: $23.33 We take a look at the 2nd quarter earnings for their 2021 fiscal year of At Home Group, the home decor superstore group. The group reported a sales increase of 50.5% for the quarter compared to the same quarter of the previous year and they reported net earnings of $89.4 million for the quarter.
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- We delivered the best quarter in the Company’s history in terms of comparable store sales, profitability and free cash flow, as well as our lowest leverage ratio since our IPO"
About At Home Group (HOME)
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 2nd quarter 2021 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $515.244 million (down from $342.321 million from the same quarter of the previous year)
- Net sales increased by 50.5% over the last 12 months
- Cost of sales : $319.117 million (up from $241.923 million for the same quarter of the previous year)
- Cost of sales increased by 31.9% over the last 12 months
- Net earnings: $89.423 million (up from $10.382 million for the same quarter of the previous year)
- Diluted earnings per share: $1.39 (up from $0.16 for the same quarter of the previous year)
- PE ratio of At Home: 17.7
- Diluted weighted-average shares outstanding: 64.186 million (down from 64.660 million for the same quarter of the previous year)
- Cash and cash equivalents: $32.405 million
- Cash and cash equivalents per share: $0.51
- Cash and cash equivalents makes up 2.16% of At Home Group's current market capital
- Cash and cash equivalents makes up 1.39% of At Home Group's total assets
- Cash and cash equivalents per share: $0.51
- Inventories: $4305.484 million
- Inventories makes up 13.1% of At Home Group's total assets
- Total stockholders' equity of At Home Group: $343.443 million
- Stockholders' equity per share: $5.35
- So At Home (HOME) is trading at 4.35 times its stockholders equity per share which is 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
- Stockholders' equity per share: $5.35
Management commentary on their 2nd 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 second quarter ended July 25, 2020.
Lee Bird, Chairman and Chief Executive Officer, stated, “We delivered the best quarter in the Company’s history in terms of comparable store sales, profitability and free cash flow, as well as our lowest leverage ratio since our IPO. We believe many of the key factors driving our strong performance have continued into the third quarter of fiscal 2020. To that effect, Q3 has started off exceptionally well with quarter-to-date comparable store sales relatively in line with Q2, as we continue to gain market share.”
Mr. Bird continued, “As a team, we are focused on putting At Home in a strong position to generate consistent and predictable results over the long term. Our revised long-term strategy put in place last year is yielding positive results this year, and we believe it will continue to propel us going forward. In addition, the recent completion of our debt refinancing provides us financial flexibility, addresses a key investor concern, and along with strong results, puts us in our best financial shape since going public four years ago.”
Lee Bird, Chairman and Chief Executive Officer, stated, “We delivered the best quarter in the Company’s history in terms of comparable store sales, profitability and free cash flow, as well as our lowest leverage ratio since our IPO. We believe many of the key factors driving our strong performance have continued into the third quarter of fiscal 2020. To that effect, Q3 has started off exceptionally well with quarter-to-date comparable store sales relatively in line with Q2, as we continue to gain market share.”
Mr. Bird continued, “As a team, we are focused on putting At Home in a strong position to generate consistent and predictable results over the long term. Our revised long-term strategy put in place last year is yielding positive results this year, and we believe it will continue to propel us going forward. In addition, the recent completion of our debt refinancing provides us financial flexibility, addresses a key investor concern, and along with strong results, puts us in our best financial shape since going public four years ago.”
Sale-Leaseback Transactions
In July 2020, the Company sold three of its properties in Grand Chute, Wisconsin; Cincinnati, Ohio; and Lutz, Florida for a total of approximately $33 million. Contemporaneously, with the closing of the sale, the Company entered into leases pursuant to which we leased back the properties.
Balance Sheet Highlights as of July 25, 2020
Outlook & Key Assumptions
Given the unprecedented and continued uncertainty related to COVID-19, the Company is not providing third quarter and fiscal year 2021 guidance at this time.
In July 2020, the Company sold three of its properties in Grand Chute, Wisconsin; Cincinnati, Ohio; and Lutz, Florida for a total of approximately $33 million. Contemporaneously, with the closing of the sale, the Company entered into leases pursuant to which we leased back the properties.
Balance Sheet Highlights as of July 25, 2020
- Net inventories decreased 30.0% to $305.5 million from $436.7 million as of July 27, 2019, primarily due to strong demand for our products as we reopened our stores following the lifting of state and local mandates related to COVID-19 and reduced inventory purchases during the time our stores were temporarily closed.
- Total liquidity was $305.8 million, including cash of $32.4 million and borrowings available under our ABL Facility of $273.4 million.
- Long-term debt was $359.5 million compared to $336.3 million as of July 27, 2019. There was no outstanding amount under our ABL Facility revolving credit loans as of July 25, 2020 compared to $276.4 million outstanding as of July 27, 2019.
Outlook & Key Assumptions
Given the unprecedented and continued uncertainty related to COVID-19, the Company is not providing third 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 $23.33. Thats a return of 52.4% provided to At Home stockholders since their listing.
The stock of At Home is trading at a lot closer to its 52 week high of $23.92 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 very positive at this point in time.
The stock of At Home is trading at a lot closer to its 52 week high of $23.92 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 very positive at this point in time.
At Home (HOME) stock vs Ethan Allen (ETH) stock over the last 3 years
The image below shows the stock price history of At Home and Ethan Allen over the last 3 years. Both firms are largely active in the home decor and interior design space in the USA. The summary below shows the stock price returns of both over the last 3 years
The stock of At Home (HOME) has easily outperformed that of Ethan Allen (ETH) over the last 3 years.
- At Home: 3.18%
- Ethan Allen: -51.8%
The stock of At Home (HOME) has easily outperformed that of Ethan Allen (ETH) over the last 3 years.
Recent coverage of At Home (HOME)
The extract below covers the latest from At Home as obtained from Investorplace.com
At Home (NYSE:HOME) earnings for the home furnishing retailer’s second quarter of fiscal 2021 have HOME stock falling after markets closed on Tuesday. That’s despite its adjusted earnings per share of $1.41 beating out Wall Street’s estimate of $1.31. Its revenue of $515.4 million also comes in above analysts’ estimate of $514.97 million.
Here’s what else is worth mentioning from the most recent At Home earnings report.
Read the full article here
At Home (NYSE:HOME) earnings for the home furnishing retailer’s second quarter of fiscal 2021 have HOME stock falling after markets closed on Tuesday. That’s despite its adjusted earnings per share of $1.41 beating out Wall Street’s estimate of $1.31. Its revenue of $515.4 million also comes in above analysts’ estimate of $514.97 million.
Here’s what else is worth mentioning from the most recent At Home earnings report.
- Adjusted per-share earnings are up 683.3% from 18 cents during the same period of the year prior.
- Revenue for the quarter is sitting 50.5% higher than the $342.32 million reported in the second quarter of fiscal 2020.
- Operating income of $125.25 million is a 474.3% increase year-over-year from $21.81 million.
- The At Home earnings also have it reporting a net income of $89.42 million.
- That’s a 791.5% improvement over the company’s net income of $10.38 million from the same time last year
Read the full article here
At Home Group (NYSE: HOME) latest stock valuation
So what do we value At Home (HOME) stock at following their 2nd quarter 2021 earnings release? Based on their latest earnings report our stock valuation models place a target price (full value price) on At Home Group of $17.70. So we do believe the stock is overvalued at its current price
We usually recommend that long term and fundamental investors look to enter a stock at least 10% below our target price. So a good entry point into the stock of At Home (HOME) would therefore be at $15.90 or below
We expect the stock to pull back from its current levels in coming weeks and months, especially considering the strong run it had recently. We therefore rate their stock as a sell.
We usually recommend that long term and fundamental investors look to enter a stock at least 10% below our target price. So a good entry point into the stock of At Home (HOME) would therefore be at $15.90 or below
We expect the stock to pull back from its current levels in coming weeks and months, especially considering the strong run it had recently. We therefore rate their stock as a sell.
Next earnings release of At Home
It is expected that At Home will release their 3rd quarter 2021 earnings report in early December 2020