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At Home Group Inc. (NYSE:HOME)
Q2 2021 Earnings Call
Jul 29, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the At Home Preliminary Second Quarter Fiscal Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Arvind Bhatia, Vice President, Investor Relations. Thank you. You may begin.

Arvind Bhatia -- Vice President, Investor Relations

Thank you, Michelle. Good afternoon, everyone, and thank you for joining us today for At Home's preliminary second quarter fiscal year 2021 earnings results conference call.

On the call today are Chairman and Chief Executive Officer, Lee Bird; and Chief Financial Officer, Jeff Knudson. In addition, President and Chief Operating Officer, Peter Corsa will be available for the Q&A portion of the call. After the team has made their formal remarks, we will open the call to questions.

Before we begin, I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. In particular, statements about our outlook and assumptions for financial performance for fiscal year 2021 and our long-term growth targets as well as statements about the markets in which we operate, expected new store openings, real estate strategy, potential growth opportunities, market share, competition, future capital expenditures, future cash flows, the impact of tariffs and the impact of the global outbreak of COVID-19 pandemic are forward-looking statements. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those are referred to in At Home's press release issued today and in filings that At Home makes with the SEC.

The forward-looking statements made today are as of the date of this call and At Home does not undertake any obligation to update any forward-looking statements. In addition, the preliminary results for the second quarter that will be discussed during this call are subject to change. Our management and external auditors have not completed our normal quarterly closing and related review procedures, and there can be no assurance that final results for the quarter will not differ from the preliminary results, including as a result of quarter-end closing procedures or adjustments.

In addition, any discussion during this call of our monthly results for the quarter will be provided to help investors understand and assess the near-term impact of the COVID-19 pandemic, but are subject to variability and may not be indicative of our results or trends for any full reporting period.

Finally, the speakers may refer to certain adjusted or non-GAAP financial measures on this call, such as adjusted EBITDA, adjusted operating income, pro forma adjusted net income and pro forma adjusted earnings per share. A reconciliation schedule showing the GAAP versus non-GAAP financial measures is available in At Home's press release issued today. If you do not have a copy of today's press release, you may obtain one by visiting the Investor Relations page of the website at investor.athome.com. In addition, from time to time, At Home expects to provide supplemental materials or presentations for investor reference on the Investor Relations page of its website.

I will now turn the call over to Lee. Lee?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Thank you, Arvind. Good afternoon, everyone. Thank you for joining us to discuss our preliminary results for the second quarter of fiscal 2021. Before I dive into our performance, I'd like to provide some context to the timing of this call. Six weeks ago when we shared our Q1 results, we highlighted the initial momentum we were experiencing in our reopened stores during Q2. We also noted our strength was across all departments and geographically broad, including the states such as Texas and Georgia that have been reopened the longest. While the early signs were encouraging, we wanted to be prudent and allow more time to read the trends. With Q2 now behind us and the benefit of additional time to understand the data and given the unprecedented environment we're currently in, we felt it was the right time to provide a business update. Our goal is to provide even greater transparency and accessibility for our investors during these uncertain times.

I'm pleased to share that business has not only remained strong, but we expect to report the best quarter in terms of comps, sales and profitability and the lowest leverage ratio in our history as a public company. We are emerging from this pandemic stronger and even better positioned as we believe we are gaining meaningful share.

Our Q2 comps were up 42%. Total sales were $515 million or up 51% and we expect adjusted EBITDA of at least $150 million, which are record results for us by far. Based on industry data available to us, we estimate our sales increased at a rate several times faster than the industry, and our market share was up meaningfully during Q2.

We believe we are benefiting from a contribution of factors -- a combination of factors. First, as customers -- or consumers are spending more time at home, they're also spending more money on decorating their homes, creating a home workspace and organizing their kitchens. As a home decor category killer, we are in the sweet-spot. Second, uniqueness and strength of our business model is resonating strongly with our customers. Our unmatched breadth and depth of assortment offered a compelling everyday low prices continues to differentiate us from our competitors. We are experiencing strength across all departments and in stores across the country, we are seeing a strong increase in traffic, gaining new customers, and our average basket size is up significantly compared to our historical average.

Third, we believe the convenience in safe social distancing afforded by our large store format, self-service model and our increasing omnichannel capabilities are providing and proving to be more powerful competitive advantage for us. Fourth, we believe the successful execution of our key comp driving strategies, including EDLP Plus campaigns, reinventions, omnichannel and loyalty is also fueling this momentum. As an example, during Q2, our recent reinventions, such as decorative accents and sheets generated comps nearly double the company average. We're also pleased that our increasing omnichannel presence remains above plan in terms of sales, basket size and attach rate. In the next few days, we expect to expand delivery in an additional 40 stores. This will allow us to offer the service in more than 70% of our stores, up from 50% of our stores just six weeks ago.

Our loyalty program, Insider Perks, has maintained its rapid growth and now has 7.5 million members, up an impressive 2.3 million or 45% year-over-year. Many of you will remember our discussions last year highlighting opportunities in product pricing, inventory and omnichannel. We challenged ourselves as a team and intensified our focus in these areas, and I'm pleased with the outcome in the first half. Our pricing is sharper than ever, and we believe it is one of the key reasons for our ongoing success. Our inventory levels and turns have improved remarkably and are contributing to healthy gross margins and cash flow. The accelerated roll-out of our omnichannel business is helping us gain wallet share and provides for us some insulation in the event there happens to be another pandemic and new shutdown. Delivering on these initiatives have set us up well for continued success. We believe we will continue to benefit from these macro and company-specific positives over the foreseeable future.

In addition, during Q2, we believe we also benefited from short-term factors, including pent-up demand, stimulus checks and the fact that some of our competitors reopened later than we did. It's difficult to gauge the exact contribution of these short-term factors to our Q2 performance and beyond. However, we are encouraged that business has been very strong beyond the initial reopening period. We are excited about our continued momentum despite competitive reopenings, competitive liquidations and the resurgence of coronavirus, which we are monitoring very closely. In select markets, experiencing a recent surge in cases, we have seen a moderate impact on sales. However, even in these markets, comps have been up solid double digits in recent weeks. Looking at recent trends, July was a strong month for us, with comps in the low 40s or consistent with our total comps for the entire quarter.

Turning now to our outlook for the rest of the year. Our everyday business, which represents 70% of the mix has remained consistently strong. With July comp for everyday business in the mid-40s, we are highly encouraged by the momentum during the quarter and exiting the quarter. We have been successful in replenishing inventory in this category and in the next 12 weeks, expect record receipts to support demand. Importantly, this is inherently a less risky category for us, and we can flex our purchases up or down commensurate with demand. While we are not providing guidance, for modeling purposes, we are prudently assuming comps will moderate through Q3 and Q4.

In the seasonal category, which represents the remaining 30% of our business, our initial orders for Halloween, fall and Christmas were placed in late March and April at the onset of the pandemic. We are cautious in our approach because of lack of visibility on the timing of store reopenings. As stores reopen to impressive volumes, we steadily increased the size and frequency of orders for seasonal product. However, we will still be inventory constrained and expect our back half seasonal inventory to be down mid-single digits. This is different compared to the first half when we had adequate seasonal inventory of patio and garden to support strong demand post reopenings. That said, we are particularly excited about the quality and freshness that we will be able to offer in our seasonal Halloween and Christmas merchandise.

With that, I'll turn it over to Jeff to provide a few financial highlights. Jeff?

Jeffrey R. Knudson -- Chief Financial Officer

Thank you, Lee, and good afternoon, everyone. I'm excited to share with you a few highlights from our preliminary Q2 results. As a reminder, we plan to release our full results and host our regular Q2 earnings call in early September.

As Lee mentioned, our Q2 comps were up 42%. Total sales were $515 million or up 51% year-over-year, and we expect adjusted EBITDA of at least $150 million. To put our Q2 adjusted EBITDA in context, for the full fiscal year 2020, we generated adjusted EBITDA of $175 million. So we are not only pleased with the record top line results, but also with the flow-through. These results help demonstrate the underlying strength of and operating leverage in our business model. We expect strong gross margins driven by leverage on the occupancy costs, and we expect significant improvement in our SG&A ratio, driven by operating leverage on our fixed costs. As a result of our strong second quarter results, our first half total sales were up 9%, and our comps were up slightly, a remarkable achievement given the disruption and store closures in Q1 and Q2.

Looking at our Q2 comp trends by month, May was the most impacted month due to store closures, but still generated low double digit comps. On the other hand, June was our best month and July was in line with our overall comps for the quarter. We are most encouraged by our July results, given we are faced with increased competition, liquidations, renewed concerns related to the surge in coronavirus cases and the amount of time elapsed since reopenings. When looking at reopened stores alone, our comps were up 62% for the quarter and up 74% for the month of May and June combined. As a reminder, all of our stores were reopened as of June 19.

Switching to the balance sheet. We estimate our liquidity at the end of Q2 was more than $280 million, including cash on hand and availability on our ABL facility. Included in this estimate are net proceeds of approximately $33 million from sale-leaseback transactions we completed recently. The transactions involved three of our stores in Grand Chute, Wisconsin; Cincinnati, Ohio; and Lutz, Florida. As a reminder, we still have nine owned properties available to provide potential liquidity in the future.

Also, as we mentioned on our Q1 call, we filed for approximately $25 million in income tax refunds under the CARES Act. Of this amount, we received $7 million in refunds during Q2 and expect to receive the remaining balance in the near future. We expect our inventory level at the end of Q2 to be down substantially versus last year and our inventory turns to have improved meaningfully.

Lastly, we anticipate our leverage ratio, which we define as net debt to adjusted EBITDA at quarter-end was approximately 1.5 times on a trailing 12-month basis, a record low for us as a public company. Said another way, our leverage ratio improved nearly 4 turns in the second quarter compared to 5.4 times at the end of Q1 as we used our cash flow to eliminate all borrowings on our ABL facility. With strong liquidity, a record low net debt to adjusted EBITDA ratio and continued business momentum, we are well positioned. We remain focused on opportunistically exploring ways to optimize our balance sheet and capital structure.

With that, I'll now turn the call back over to Lee for final remarks.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Thanks, Jeff. With our stores fully opened and business firing on all cylinders, one of the most gratifying aspects has been the ability to bring back our furloughed employees. In addition, for the 60% of home office employees that took pay cuts, we've been able to restore salaries to pre-COVID levels. We've also been able to institute merit increases and lifting the hiring freeze put in place due to COVID-19. I want to personally thank our employees for their extraordinary grace and endurance during a tough period.

To our investors, I'd like to emphasize we remain excited about our current positioning and the vast untapped opportunity in front of us. We continue to believe our total addressable market includes at least 600 stores over the long term. We're focused on managing the business prudently and strive to remain excellent stewards of your capital.

With that, operator, please do open the line for questions.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.

Simeon Gutman -- Morgan Stanley -- Analyst

Hey, everyone, I hope everyone's good and nice results. I wanted to ask first about inventory. You mentioned it's in a better position and turns will be yum or better. Can you talk about, will inventory or the lack of it constrain you in any way in the next couple of months or the next quarter or two?

Jeffrey R. Knudson -- Chief Financial Officer

Hey Simeon, this is Jeff. Really, I think right now, the merchant team and our buying teams have done a great job. We've flipped so weekly open to buy, and they're chasing right now on the everyday side. I think as Lee said, when we look at the next two months, we've got record flow coming into our distribution centers. And we feel good about where the everyday inventory will be in the near future. When we look at the seasonal side, because we had to make those decisions in the late March and early April time-frame, we will have some constraints from a seasonal standpoint. But if the demand is there, we would expect better full price selling and really nice margin from our seasonal assortment in the back half.

Simeon Gutman -- Morgan Stanley -- Analyst

Okay. And my follow-up, it's maybe two parts, it's just confidence around retaining customers, I think we've heard from a bunch of retailers who've done really well and made comments around it, and so, curious what gives you confidence in that. And then, you mentioned in the release, gaining share and the numbers would be hard to refute that, but do you have other data points of what the physical brick and mortar home furnishing companies are growing at?

Jeffrey R. Knudson -- Chief Financial Officer

Yeah. On the retaining customers, we've seen a really large repurchase rate from our customers. So they're not only they're returning more often, but their basket size is bigger. We have that data because of our loyalty program. So we can see that they're coming in. We can see that they're coming in more often and what they're spending and what's in their basket. So we're thrilled with that. That's the benefit of a loyalty program and all that data that we've been in -- at the time we've been investing in that program. And we look forward to actually having an upgrade to that program in the next few weeks. So that will continue to add more value for them in the future.

We're also seeing new customers. We're seeing new customers that are engaging in the brand that haven't before that are joining the loyalty program. They see the value when they come in, in their first visit, right from the time they see the Flash Find at the first table. It shows the Flash Find pricing. It shows that there's value in joining the loyalty program. So we're having increased membership growth there and new visits from new customers. So I'm thrilled with our existing customers coming in more often. I'm really excited about new customers engaging in the brand for a variety of reasons. And we talk about how we're gaining market share or how we -- what we see in terms of market. We have got -- we have data like other people do. And what you do is you take proprietary information and you look at it and you read the data. A lot of you have all sorts of data out there from the -- that's why we said with the data that we have, we're able to see how other players are doing in this category and even other retailers in other categories. So we can see overall consumer trends and behavior, and try to read and react accordingly. And with that data, we can see that we're more than 2 times even greater than the industry average.

Simeon Gutman -- Morgan Stanley -- Analyst

Okay, thanks very much, guys. Be well.

Jeffrey R. Knudson -- Chief Financial Officer

Thanks. You too.

Operator

Thank you. Our next question comes from the line of John Heinbockel with Guggenheim. Please proceed with your question.

John Heinbockel -- Guggenheim Partners LLC -- Analyst

Lee, curious how customers are engaging with curbside pickup as stores reopen? And the degree to which that's an opportunity going forward incrementally?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Yeah. Well, obviously, when we closed toward March 22nd, we had to offer a way in which they could engage with us and buy product. And so we did not only roll out Buy Online, Pick Up in Store to all stores, almost all stores and then we added curbside pickup as a solution as well. And that was the primary way in which they were buying products. Once the store is reopened, some customers just went into the store and picked up their orders, and some people never even did the Buy Online, Pick Up in Store anymore. What I would say is even curbside pickup orders still are much from an absolute orders are still much higher than we had ever expected. We're pleased with that. The order size is bigger. We do like them to come into store because when they do come in, the add-on rate is even better for us. But what we're trying to do going forward is we continue to try to enhance that curbside pickup and make it more and more contactless, and we'll have some upgrades in the next few weeks around that as well to make it even better for them. And we'll continue to evolve our omnichannel strategy and our enhancements going forward. We told you we were going to do a multiyear strategy, and there will be more to come in the future.

John Heinbockel -- Guggenheim Partners LLC -- Analyst

And then secondly, obviously, these results should do two things, right, should make the new bank facility, should facilitate that. What's the thought on pace and timing and cost of that, number one? And then secondly, you should be in a position, I would think, to restart 10% unit growth early in 2021, is that fair?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Can you state the first question again?

John Heinbockel -- Guggenheim Partners LLC -- Analyst

Yeah. Well, just in terms of new bank facility, right, that was going to be a priority between now and year-end, and this should obviously help that significantly.

Jeffrey R. Knudson -- Chief Financial Officer

Yeah, John, I mean, this is Jeff. We've actually, on our last call, we were really happy when we got the FILO done, and we were able to tap the sale-leaseback market in the month of July, sell three properties. We don't have anything to announce right now as it relates to a new debt deal, but it is a priority for us. We're obviously very mindful of the maturity. And as we said in the prepared remarks, we'll opportunistically take a look at that when the market is available to us.

John Heinbockel -- Guggenheim Partners LLC -- Analyst

Okay. And the expansion restart --yeah.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Yeah. On the expansions, as you know, we opened seven stores this year. Once COVID hit, we stopped all construction on existing projects. We will restart those at the beginning of the year. We intend to open up seven to 10 stores next year. This will be a time in which we can focus on improving our overall capital structure and liquidity. And then the following years when we'll go back to 10% unit growth.

John Heinbockel -- Guggenheim Partners LLC -- Analyst

Okay, thanks.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Zach Fadem with Wells Fargo. Please proceed with your question.

Eric Michael Cohen -- Wells Fargo Securities, LLC -- Analyst

Hi, this is Eric on for Zach. I was just wondering if you can talk about the new customers that you're getting. Are you seeing anything in terms of the over-indexing versus in-store versus omnichannel?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Eric, this is Lee. What I would say is that as the quarter progressed, people felt more and more comfortable in the store and less needing the curbside pickup. So what I would say is the majority of the customers came in the store, joined the loyalty program in the store, but we still saw a lot of sign-ups on the loyalty program in online as well through that process. But I would say it was the store experience that helped them feel most comfortable engaging with us and maintaining a relationship thereafter.

Eric Michael Cohen -- Wells Fargo Securities, LLC -- Analyst

And you guys mentioned, with the strong top line, you're seeing good SG&A leverage. Have you brought all the employees back or are you finding opportunities to be more efficient cost-wise where you can maybe operate with a lower cost structure?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

We already have a very tight cost structure. I would tell you, in the stores, it's 25 to 30 employees total for the entire store to cover 100,000 square feet. So it's not that we're going to run leaner there. We've actually had -- because of these record sales results have had to add employees. At the home office, we brought everyone back from furlough, that had been furloughed. And we feel like we needed everybody there, given all hands on deck requirement. When you're up 40% comps and 50% total revenue growth, and you see that momentum all the way through July, you need as much help as you can, but it's a lean team. It's already probably one of the most efficient retail operations I've ever seen, if not the most efficient I've ever seen from a home office support standpoint.

Operator

Thank you. Our next question comes from the line of Daniel Hofkin with William Blair & Company. Please proceed with your question.

Daniel Hofkin -- William Blair & Company -- Analyst

Good afternoon. Just wanted to see if you could provide may be a little bit more color on the margin dynamics that you're expecting, I recognize it's still preliminary, and then I had one follow-up question as well.

Jeffrey R. Knudson -- Chief Financial Officer

Yeah, Dan. I mean, this is Jeff. So when we look at the adjusted EBITDA of $150 million, that would imply with the sales, 29% adjusted EBITDA margins. That's up over 1,500 basis points to what we saw last year. A lot of that is going to come from leverage on our fixed expenses, just given the tremendous sales volume that we saw. So occupancy and depreciation within gross margin will leverage very nicely as well the fixed expenses at the home office.

Daniel Hofkin -- William Blair & Company -- Analyst

Okay. And then you talked sort of -- and I apologize if you've addressed this, I didn't catch it, but about fairly broad-based growth across categories and geographies. Is there anything at all to call out just in terms of things that were especially strong category-wise some of the reinventions you mentioned. But any additional color about things that were especially strong or not quite as strong as the overall average?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Sure. Dan, this is Lee. The strength really was broad-based. Everyday and seasonal, we're equally strong in Q2 for us. We feel like the assortment in the pricing -- our sharp pricing is resonating. On the seasonal side, patio was very strong. We're pleased with that. And within patio, patio furniture category was especially strong, which was a reinvention, which once again gives us confidence in our approach to reinvention. With a real focus on lower price points, our sling, and we did a value-engineered version of our wicker furniture, and those were some of our best sellers. And so that tells you that, that lower prices are resonating for actually all demographics.

When I think about the everyday business, the reinventions were particularly strong. I mentioned that in our call, nearly double the company comp performance. So I think of decorative accents and sheets. Those were particularly strong for us. And even if you think about non reinvented categories like office furniture, food prep, bedding, living room, outdoor shade, I mean just across the board, all of our 14 departments were strongly positive. So we're pleased, but some outperformed even those.

Daniel Hofkin -- William Blair & Company -- Analyst

Got it. And it sounds like -- you talked about not just merchandising, but also pricing being kind of sharper for you guys relative to kind of last year kind of reestablishing the value. Is that kind of fair to say?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

It is. We went back and repriced a number of our furniture. Those are the ones that were most affected. Think about all the tariff affected categories, wood-based product. So we had increased prices, as we mentioned last year, following our competitors. But we had crossed some artificial price barriers. So over the December period, we strategized the price adjustments we made those in January and February and you can see on our website, you'll see now lower prices on those categories in those particular items in furniture and accent furniture. And I would tell you, in our price checks, we do every other week comp shopping. We can tell that we are the sharpest we've ever been in terms of pricing, the most competitive, and we compare ourselves versus everybody, and every department has at least five competitors, they compare themselves to obviously, the mass players, the e-commerce players and then a particular competitor for their department, and we're the most competitive and the sharpest we've ever been.

Daniel Hofkin -- William Blair & Company -- Analyst

Great. Thanks. Best of luck obviously rest of the summer.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Thanks, Dan.

Operator

Thank you. Our next question comes from the line of Jonathan Matuszewski with Jefferies. Please proceed with your question.

Jonathan Matuszewski -- Jefferies LLC -- Analyst

Hey guys. Thanks for taking my questions; nice quarter. Just a follow-up question on the new customers you've acquired. I think you talked about much higher baskets that you're seeing relative to pre-COVID levels. Did these new customers look any differently from those -- your core customers pre-COVID, whether that's on the basis of household income or any other measure or is it pretty much the same customer you've seen historically? Anything to call out there?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Well, I would say to look a lot like our existing customer, the growth was across all income demographics and as well as all age grouped. When we saw that, we've obviously been focused on a younger customer for years and trying to make sure that our product assortment addresses a younger customer from the time that they go off to college to the time that they get their first home and thereafter. We saw growth in the millennials. We saw growth as well as from an income standpoint in both under $30,000, $30,000 to $50,000, $50,000 to $70,000, $70,000 to $100,000 and above $100,000. We saw growth across all income groups, which was promising. You could see that the pricing was resonating across all of that. There's people that are trading down, and that typically happens when you have a recession, and we're in the middle of a recession, and we're a value player and value players win in a recession. So I love our positioning. I love our pricing. And what I would tell you is we saw that maintain itself across the quarter.

Jonathan Matuszewski -- Jefferies LLC -- Analyst

That's great. And then just a follow-up. How are you guys thinking about the back-to-school and especially back-to-college dynamic, there's still a lot of -- still a very fluid situation, a lot of uncertainty for parents and college students. And obviously, you guys have a number of categories oriented toward the college student dorm decorating and whatnot. What are your reads on how some of those categories are doing? If you've seen kind of outperformance in terms of early shopping for that occasion? And what are your expectations for that type of the assortments, if we do see kind of more of a hybrid or a virtual learning model, I guess, more so for you guys at the college level?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Sure. And I'm particularly close to this because I've two undergrad and now a PhD student going back-to-school this fall. So I'm well aware of what's going on, and Jeff has an incoming freshman college as well. So we're attuned to that. But I would say what as a company we learned last year is we were too literal with back-to-campus and calling it back-to-campus versus it's a time in which people are actually in a life change, whether they've finished school and they're getting their first department out of college or they're going to college or they're moving or they're changing apartments, it's a time where people actually are in a life change. And so we actually dialed down the language around back-to-campus looks and just focused on trend and solution selling. And so our front tables that we dedicate to that season is -- back-to-campus season is now the most productive we've ever seen for this category.

Really pleased with its performance. I think it's because we're focused on what's trending and made sure we had accessible price point, and we offered full solutions, that included bedding and sheets, but it also included items for their living room and their kitchen. And what we found was it's been very successful for us, but not as literal. I mean so maybe people aren't going back to campus and they're going to stay at home, but then they want to update where they're staying or they're going to find an apartment with some friends and still do online classes, but near campus and the like either way, that life chapter and those life changes are supported with products that's on trend at the lowest price that they can find.

Jonathan Matuszewski -- Jefferies LLC -- Analyst

That's great, really helpful. Thank you.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Thanks, Jonathan.

Operator

Thank you. Our next question comes from the line of Brad Thomas with KeyBanc Capital Markets. Please proceed with your questions.

Brad Thomas -- KeyBanc Capital Markets -- Analyst

Hi, good afternoon. Thanks for taking my question. Quite a quarter here. I mean EBITDA approaching what you did all last year in EBITDA and more than what you used to do in full year is really something to behold. My first question was going to be about just understanding demand in the current trends. Obviously, there's a lot of cross currents for the consumer right now. But Lee, I was hoping you could speak to your assessment of how much pent-up demand was a tailwind in the strong results in this quarter?

And then secondly, how much you think nesting in the consumers sort of inability to travel and the pullback that they've had on things like riding on airplanes could continue to help your business as you look forward here?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Sure, Brad, thanks. Thanks for the commentary about the quarter. We feel that, too. It's nice to have -- to deliver some records and have some profitability that is just really going to carry us through the whole year. It feels good. But I would tell you, from a comp standpoint, the initial strength was we felt like, as we mentioned in the previous call, was pent-up demand and stimulus checks, competitors weren't fully opened. But as the quarter continued, we saw our performance continuing to be strong. As we mentioned that the July comps were consistent with the total quarter comps. And we saw strength across all our markets and all of our categories, both traffic and ticket are both up, and we're up meaningfully through the quarter.

So it wasn't just during the time where there was some extra money in people's pocket and they were just finally getting out of their home. We do believe that this category is going to benefit from this situation. Consumers are spending more time at home, they're spending more money on their home. Many of us had our vacation plans change and staycation is now the -- one of the common phrases that people are using. And for us, we're able to be differentiated in this time where our selection makes it easy because we're one-stop shop. And people are very careful about their trips now. If they're going to leave their home, they're going to make sure they're going to go and it's going to be worth the trip. So we've got a full assortment. Our prices are winning and a value player wins in a recession, as you well know, and they've got greater access to compare prices, and they can see that our prices are very sharp. And so we're seeing and experiencing very high traffic and very high conversion. And the store environment creates a space in which it saves social distancing. And you've got two carts apart, one way aisles. We clean our registers after every transaction and our carts after every time a customer touches them. And so -- and people know that. We've been very clear about safe shopping At Home. And our customers are pleased with that and are grateful for that. We require mask in our stores and our employees are wearing masks.

And so you take all of that together, but then all the effort we've done in the past year those -- that EDLP Plus that campaign-driven approach. When we highlight a category, those campaigns are working. All of our campaigns drove strong positives in the second quarter. I mean, as we mentioned in Q1, three of our four drove positive comps to all of our campaigns in Q4 delivered great outcomes. And our reinventions, those categories are just off the charts doing great. As we mentioned, the decorative accents and sheets double the company average when your company average is 40 -- in the low 40s, and you know those -- how big those numbers are. So we feel like the work that we've done over the past little while coupled that with omnichannel, making it safer to shop and easier to access product. And then the benefits of the loyalty program are now gaining traction on our work from a year ago, which we started then.

Brad Thomas -- KeyBanc Capital Markets -- Analyst

That's very helpful. And how should we think about the outlook for expenses in the balance of the year coming off of conservatism on your part early in the year followed by this nice momentum that you're seeing right now?

Jeffrey R. Knudson -- Chief Financial Officer

Yeah. I would say, Brad, that we're really looking at returning to a normal level. So obviously, with store labor, marketing spend, returning, as Lee mentioned, all of our furloughed employees have returned to their home office, the tiered salary reductions that we put in place, those have abated. So it's really as we look into the back half from an expense standpoint, kind of, back to normal levels across all those large buckets of spend.

Brad Thomas -- KeyBanc Capital Markets -- Analyst

Got you. Very helpful. Thanks so much, Jeff.

Operator

Thank you. Our next question comes from the line of Curtis Nagle with Bank of America. Please proceed with your question.

Curtis Nagle -- Bank of America Merrill Lynch -- Analyst

Good afternoon. Thanks very much. Just a quick question on the sales split. So seasonal is about 30% of sales for the year. What's the split for the fourth quarter?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

We normally, we've averaged about 75%-25% split in Q3, Curt, in the last couple of years, and then the back half has blended closer to 70%-30%.

Curtis Nagle -- Bank of America Merrill Lynch -- Analyst

Okay. Got it. And then just a couple of quick balance sheet and cash question. So how big was the ABL borrowing before you paid off? And should we still be thinking $40 million in capex for the year or something higher now?

Jeffrey R. Knudson -- Chief Financial Officer

Right now, we ended Q1 with $228 million drawn on the ABL. And so that amount was fully paid off with the cash flow generation, the FILO of the sale-leaseback proceeds during the quarter. And as we look at capex right now, I think, one of the things is we've obviously started a number of projects that we pulled back on and we had anticipated reopening those -- or opening those stores up next year. I do think some of that spend will move into this year into the back part of this year. So probably from a gross standpoint, probably closer to $60 million on a gross, but then obviously, we completed the sale leaseback transaction. So still net capex, sub $30 million, closer to $27 million, probably.

Curtis Nagle -- Bank of America Merrill Lynch -- Analyst

Okay, great. Thanks very much. I appreciate it.

Jeffrey R. Knudson -- Chief Financial Officer

Thanks, Curt.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Anthony Chukumba with Loop Capital Markets. Please proceed with your question.

Anthony Chukumba -- Loop Capital Markets -- Analyst

Thank you, and congrats on the strong results. So the question I had, I know it's still relatively early, but I was wondering if you could give us any early learnings from your shift to home program to the third party, so the e-commerce orders that are being shipped or delivered to customers' homes through a third-party. Any early learns from that or any early read on that? Thank you.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Sure. Thanks, Anthony. As you know, we started the beginning of the year with the 28-store pilot, and then we accelerated our timetable and went -- what we had thought was going to be an 18-month plan to roll-out BOPIS and delivery. In 60 [Phonetic] days, we rolled it all out. We're really pleased -- I'm super grateful for how our leadership team executed those actions and our whole leadership team and store team delivered on those. I would tell you, we rolled it out at a fraction of the time and the cost. It helped preserve jobs when the stores were closed, which I'm grateful for and now curbside is available and -- curbside and BOPIS is available in 96% of our stores. And I mentioned now delivery is at 70% of our stores, with an increase of 40 more stores. And you specifically asked about delivery.

What we're pleased with is our delivery partner, PICKUP, took the challenge that we gave them, which was, we used to have -- we have a partnership with them, but the price -- starting price point was $49, which was just not an attractive price point. And we knew people wanted to have it delivered at their home. So we challenged them to say, can -- we need to start at $10. And obviously, it will scale on based on what they put in the basket, when they put in the vehicle to deliver to their home. But at least they know that they're the ones adding those things to the basket. And as you know, those -- the charge that we get from PICKUP is just passed through to our customer. And we saw a very high take rate initially. And we continue to see a large number of orders are being delivered each and every day. So we're pleased with that. We made it instead of same day, we made it next day to make it more efficient for our delivery partner from a cost efficiency standpoint. They appreciated that. Our customers still is getting a lot faster than they would from any [Technical Issues] out there. And what I would say is that's going to continue to improve our capabilities over-time. And during the quarter, the actual number of delivery, it went down a little bit, as you would expect because then the store was open, and they could come in. But the ticket remained very big, really nice size ticket for delivery. And it was the items that you would expect that people need help getting home. So think about furniture, think about patio furniture, all the large items, we found a solution for them. And since our prices are below everybody else's prices out there, even with shipping, they found it was still a more cost-effective solution to buy from us than anywhere else.

Anthony Chukumba -- Loop Capital Markets -- Analyst

Got it. And then just one clarification. Is -- so how is that sale? If I buy something online and having it sent to my home? Does the store record that sale? Is that number -- is that in your comparable store sales number? In other words, you compare store sales really just comparable sales because it includes go online? Like how does that work?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Yeah, so all sales go through the store. They're the ones that do all the work. They're the ones who fulfill the order, and work with PICKUP to have it picked up and delivered, and so everything runs to the store because that's the center of our universe. That's where the inventory is coming from as well.

Anthony Chukumba -- Loop Capital Markets -- Analyst

Okay. So comparable store sales will also include sales delivered to the home?

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

It'll include delivery, BOPIS, curbside pick-up, all of our sales go through the store, and that is included in our same-store sales number, yeah.

Anthony Chukumba -- Loop Capital Markets -- Analyst

Got it. Thank you.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

You bet. Thank you, Anthony.

Operator

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the call back over to Mr. Bird for any closing remarks.

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Thanks so much. Hey, thanks, everyone, for joining us this afternoon and for your interest in our company. I hope you can sense how excited and optimistic we are about At Home's future prospects. We look forward to keeping you updated along the way. Take care and be safe.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Arvind Bhatia -- Vice President, Investor Relations

Lewis L. Bird III -- Chairman of the Board and Chief Executive Officer

Jeffrey R. Knudson -- Chief Financial Officer

Simeon Gutman -- Morgan Stanley -- Analyst

John Heinbockel -- Guggenheim Partners LLC -- Analyst

Eric Michael Cohen -- Wells Fargo Securities, LLC -- Analyst

Daniel Hofkin -- William Blair & Company -- Analyst

Jonathan Matuszewski -- Jefferies LLC -- Analyst

Brad Thomas -- KeyBanc Capital Markets -- Analyst

Curtis Nagle -- Bank of America Merrill Lynch -- Analyst

Anthony Chukumba -- Loop Capital Markets -- Analyst

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