COVID-19 Pressures At Home After Tough Q4

At Home asserted that the short holiday season hurt its fourth quarter and full-year comps, which factored into lower earnings. Now the coronavirus pandemic has diminished store traffic as well.

Net loss in the fourth quarter was $224.1 million, or $3.50 per diluted share, compared to net income of $29.6 million, or 45 cents per diluted share, in the year-earlier period. Adjusted for one-time events, net income was $23.9 million, or 37 cents per share versus $29 million, or 44 cents per share, in the year-prior quarter. Adjusted earnings per share in the quarter matched a MarketBeat-published analyst consensus estimate.

Comparable sales slipped 3.1% in the quarter year over year, primarily driven by the impact of a shorter holiday selling season and the resulting promotional environment, the company maintained. Net sales increased 12.3% to $397.7 million from the year-previous period driven by a net increase in open stores. Operating loss was $209.1 million versus operating income of $44.6 million.

In the full fiscal year, net loss was $214.4 million, or $3.35 per diluted share, compared to net income of $49 million, or 74 cents per diluted per share, in the year earlier. Adjusted net income was $36.9 million, or 57 cents per share versus $77.2 million, or $1.17 per share, in the year prior.

Comparable sales decreased 1.7% year over year, primarily due to a shorter holiday selling season and the resulting promotional environment during the fourth quarter as well as adverse weather conditions in the first half of the fiscal year and unfavorable customer response in certain categories to tariff-related strategic price increases, the company indicated. Net sales increased 17.1% to $1.37 billion from the year previous driven by the net increase in open stores. Operating loss was $159.5 million versus operating income of $76 million.

Lee Bird, At Home chairman and CEO, said, “We were pleased with the momentum we saw in the back half of the fourth quarter as comparable store sales accelerated, and we exited the year with a healthy inventory position and $105 million in free cash flow improvement. We have been implementing key merchandising and marketing initiatives in fiscal 2021 to continue driving the business forward, and we remain focused on delivering great products at great prices.”

Bird noted that At Home had experienced lower traffic volume in stores in the middle part of March as the COVID-19 outbreak spread.

“We are prioritizing the health and safety of our customers and team members by temporarily closing stores and rapidly accelerating our omnichannel capabilities,” he said. “We have also taken swift and bold action to preserve liquidity and have proactively drawn down our revolving credit facility to give us increased financial flexibility. Due to this period of unprecedented uncertainty, we are not providing first quarter and fiscal year 2021 guidance at this time, but we remain confident in the long-term strength of our lean, flexible operating model and the significant whitespace opportunity that still lies ahead.”