At Home Group (HOME) reported earnings on Wed 4 Sept 19 (a/h)

** charts before earnings **

 

** charts after earnings **

At Home Group beats by $0.03, reports revs in-line, comps -0.4%; guides OctQ EPS below consensus, guides OctQ revs in-line; reaffirms FY20 EPS guidance, guides FY20 revs in-line

Reports Q2 (Jul) earnings of $0.18 per share, excluding non-recurring items, $0.03 better than the S&P Capital IQ Consensus of $0.15; revenues rose 19.0% year/year to $342.32 mln vs the $343.16 mln S&P Capital IQ Consensus.

• Reports Q2 comps of -0.4% vs prior guidance of -1% to +1%.
• Gross margin decreased 450 basis points to 29.3% from 33.8% in the prior year period primarily as a result of product margin contraction due to incremental markdowns, increased occupancy costs resulting from both the adoption of ASC 842 "Leases" as well as fiscal 2020 and 2019 sale-leaseback transactions, and costs associated with opening the Company's second distribution center.
• Adjusted operating margin decreased 300 basis points on a recast basis to 6.8% of net sales driven by the gross margin and adjusted SG&A1 factors described above.

Co guides to Q3 (Oct) adjusted EPS of $(0.04)-(0.01) vs consensus of $0.05; guides to Q3 revenue of $312-317 mln vs consensus of $316.9 mln. Guides to Q3 comps of -2.5% to -0.5%.

Co issues guidance for FY20, reaffirms EPS of $0.67-0.74, excluding non-recurring items, vs. $0.68 S&P Capital IQ Consensus; sees FY20 revs of $1.372.5-1.387.5 bln (Prior $1.370-1.390 bln) vs. $1.38 bln S&P Capital IQ Consensus.

• Sees Gross Margin in the range of 29.2-29.4% (Reaffirm)
• Adjusted Operating Margin in the range of 6.6-6.9% (Reaffirm)
• Full year comp guidance lowered slightly to -1.5% to +0.5% from prior guidance of -1% to +1%.