HOME: At Home Group Inc. (NYSE: HOME)

At Home Group Inc. (NYSE: HOME), the home décor superstore, recently stated its financial results for the 2nd-quarter finished July 27, 2k19.
For the Thirteen Weeks finished July 27, 2k19
• The Company opened 13 new stores in the 2nd-quarter of fiscal 2k20 and finished the quarter with 204 stores in 39 states. The Company has opened a net 39 stores since the 2nd-quarter of fiscal 2k19, representing a 23.60 percent incline.
• Net sales raised 18.70 percent to $342.30M from $288.50M in the quarter finished July 28, 2k18 driven by the net incline in open stores. Comparable store sales1 reduced 0.40 percent mainly because of adverse weather conditions early in the quarter.
• Gross profit raised 3.10 percent to $100.40M from $97.40M in the 2nd-quarter of fiscal 2k19. Gross margin reduced 450 basis points to 29.30 percent from 33.80 percent in the previous year duration mainly as a result of product margin contraction because of incremental markdowns, raised occupancy costs resulting from both the adoption of ASC 842 “Leases” in addition to fiscal 2k20 and 2k19 sale-leaseback transactions, and costs associated with opening the Company’s 2nd-distribution center.
• Selling, general and administrative costs (“SG&A”) reduced 28.70 percent to $76.70M from $107.60M in the prior year duration, mainly because of the nonrecurrence of $41.50M of one-time, non-cash CEO stock-based compensation cost recognized in the 2nd-quarter of fiscal 2k19. Adjusted SG&A1 raised 16.30 percent to $75.40M contrast to a recast3 $64.80M in the 2nd-quarter of fiscal 2k19. Adjusted SG&A1 as a percentage of net sales improved by 50 basis points on a recast3 basis to 22.00 percent, mainly because of leverage of corporate overhead.
• Operating income was $21.80M contrast to a loss of $11.80M in the 2nd-quarter of fiscal 2k19. Adjusted operating income1 reduced 18.20 percent to $23.20M from a recast3 $28.30M in the 2nd-quarter of fiscal 2k19. Adjusted operating margin1 reduced 300 basis points on a recast3 basis to 6.80 percent of net sales driven by the gross margin and adjusted SG&A1 factors described above.
• Interest cost raised to $8.20M from $6.70M in the 2nd-quarter of fiscal 2k19 because of raised borrowings to support our growth strategies and a year-over-year incline in interest rates.
• Income tax cost was $3.20M, and the effective tax rate was 23.50 percent. In the 2nd-quarter of fiscal 2k19, a pre-tax loss, partially offset by recognition of excess tax benefits related to stock option exercises, drove an income tax benefit of $8.40M.
• Net income was $10.40M contrast to a net loss of $10.10M in the 2nd-quarter of fiscal 2k19. Adjusted Net Income1 was $11.40M contrast to a recast3 $20.60M in the 2nd-quarter of fiscal 2k19.
• EPS was $0.160 contrast to $(0.160) in the 2nd-quarter of fiscal 2k19. Pro forma adjusted EPS1 was $0.180 contrast to a recast3 $0.310 in the 2nd-quarter of fiscal 2k19.
• Adjusted EBITDA1 reduced 4.40 percent to $47.10M from a recast3 $49.30M in the 2nd-quarter of fiscal 2k19.
For the Twenty-six Weeks finished July 27, 2k19
• Net sales raised 19.10 percent to $648.60M from $544.70M in the 1st-half of fiscal 2k19, driven by the net incline in open stores. Comparable store sales1 reduced 0.60 percent mainly because of adverse weather conditions.
• Gross profit raised 3.20 percent to $188.40M from $182.60M in the 1st-half of fiscal 2k19. Gross margin reduced 440 basis points to 29.10 percent from 33.50 percent in the previous year duration mainly because of product margin contraction because of incremental markdowns, raised occupancy costs resulting from both the adoption of ASC 842 “Leases” and fiscal 2k20 and 2k19 sale-leaseback transactions, and costs associated with opening the Company’s 2nd-distribution center.
• SG&A reduced 8.0 percent to $153.60M from $167.10M in the 1st-half of fiscal 2k19, mainly because of the nonrecurrence of $41.50M of one-time, non-cash CEO stock-based compensation cost recognized in the 2nd-quarter of fiscal 2k19. Adjusted SG&A1 raised 23.00 percent to $151.40M contrast to a recast3 $123.00M in the 1st-half of fiscal 2k19. Adjusted SG&A1 as a percentage of net sales raised 70 basis points on a recast3 basis to 23.30 percent mainly because of raised store labor, advertising and preopening costs to support our growth strategies, partially offset by leverage of corporate overhead.
• Operating income was $47.70M contrast to $12.40M in the 1st-half of fiscal 2k19. Adjusted operating income1 reduced 35.00 percent to $33.50M from a recast3 $51.50M in the 1st-half of fiscal 2k19. Adjusted operating margin1 reduced 430 basis points on a recast3 basis to 5.20 percent of net sales driven by the gross margin and adjusted SG&A1 factors described above.
• Interest cost raised to $16.00M from $12.50M in the 1st-half of fiscal 2k19 because of raised borrowings to support our growth strategies and a year-over-year incline in interest rates.
• Income tax cost was $7.40M, and the effective tax rate was 23.40 percent. In the 1st-half of fiscal 2k19, a pre-tax loss, partially offset by recognition of excess tax benefits related to stock option exercises, drove an income tax benefit of $8.40M.
• Net income raised to $24.30M contrast to $8.30M in the 1st-half of fiscal 2k19. Adjusted Net Income1 was $13.30M contrast to a recast3 $38.80M in the 1st-half of fiscal 2k19.
• EPS was $0.370 contrast to $0.130 in the 1st-half of fiscal 2k19. Pro forma adjusted EPS1 was $0.200 contrast to a recast3 $0.590 in the 1st-half of fiscal 2k19.
• Adjusted EBITDA1 reduced 10.70 percent to $80.90M from a recast3 $90.60M in the 1st-half of fiscal 2k19.
Balance Sheet Highlights as of July 27, 2k19
• Net inventories raised 31.70 percent to $436.70M from $331.50M as of July 28, 2k18, mainly because of a 23.60 percent incline in the number of open stores.
• Total liquidity (cash plus $133.10M of availability under our revolving credit facility) was $146.20M.
• Long-term debt was $336.30M contrast to $288.90M as of July 28, 2k18. In Addition To, there was $276.40M outstanding under our revolving credit facility as of July 27, 2k19 contrast to $195.50M as of July 28, 2k18. Raised borrowings were mainly driven by a net incline of 39 new stores year-over-year.