New stores drove At Home sales in the second quarter even as adjusted earnings declined, if not as much as Wall Street expected.
Net income was $10.4 million, or 16 cents per diluted share, compared to a net loss of $10.1 million, or 16 cents per diluted share, in the year-previous period. Adjusted for one-time charges, net income was $11.4 million, or 18 cents per diluted share, versus $20.6 million, or 31 cents per diluted share, in the quarter a year before. At Home topped a MarketBeat-published analyst consensus adjusted earnings per diluted share estimate of 14 cents.
Comparable store sales decreased 0.4% in the quarter year over year primarily due to adverse weather conditions early in the period, At Home asserted. Net sales increased 18.7% to $342.3 million versus the quarter in the year prior, driven by revenue from new stores. Operating income was $21.8 million compared to a loss of $11.8 million in the year earlier period.
Lee Bird, At Home chairman and CEO, said, “We are pleased with the second quarter progress we made on our financial objectives. We opened 13 new stores and generated nearly 19% net sales growth, while also reducing inventory levels and navigating unseasonable weather early in the quarter. Considering favorable expense timing, all of our profit metrics, including pro forma adjusted EPS of 18 cents, were in line with our expectations. I am also pleased with our team’s accomplishments this quarter in successfully navigating a fluid tariff situation and implementing key marketing and merchandising initiatives focused on driving store traffic and strengthening our customer value proposition. As we look to capitalize on our significant whitespace opportunity while driving meaningful shareholder returns, we are updating our growth targets to better balance store expansion and strong profitability with leverage improvement and positive free cash flow. As a differentiated low-price leader with an unmatched assortment— enabled by a low-cost structure and a flexible real estate strategy— we remain confident that we have the right strategic priorities in place to continue delivering growth and profitability for years to come.”