Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of At Home Group Are Climbing Today

By Lou Whiteman - Mar 10, 2020 at 11:43AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fiscal 2020 results will come in better than the home goods retailer originally warned.

What happened

Shares of At Home Group (HOME) climbed 10% on Tuesday after the home furnishings retailer provided improved guidance for fiscal fourth-quarter results. The stock slumped in December after lowering full-year guidance, but the last three months of the fiscal year apparently went better than management had feared.

So what

On Tuesday morning, At Home said it expects to report fourth-quarter adjusted earnings of $0.37 per share on revenue of $397.7 million when it reports on March 24, beating the consensus estimate for $0.35 per share in earnings on revenue of $391 million. Comparable store sales are now expected to come in down about 3.1%, compared to a previous forecast of down 6% to down 4%.

Living room decor on display.

Image source: Getty Images.

For the full fiscal year, At Home now expects to report adjusted earnings of about $0.57 per share on revenue of $1.37 billion. The company had previously guided to expect earnings of between $0.53 and $0.56 per share on revenue of between $1.35 billion and $1.36 billion.

Chairman and CEO Lee Bird said results were aided by a strong finish to the company's fiscal year.

"We are pleased with the comparable store sales improvement we delivered in the back half of the fourth quarter, our healthy inventory position to end the year and the $100+ million improvement in free cash flow we made during fiscal 2020," Bird said.

Now what

The company appears to be rebounding off of its lows, but new dangers lurk ahead. Bird said At Home is closely monitoring the COVID-19 coronavirus impact on its supply chain and on consumer demand. Management will update the situation and discuss what they are seeing in terms of demand trends on the March 24 earnings call.

Even after Tuesday's jump, shares of At Home are still down more than 84% on the year, and substantial questions remain about the overall health of the U.S. consumer and how severely the coronavirus outbreak will dampen economic activity. There is still a good deal of uncertainty surrounding this company.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

At Home Group Inc. Stock Quote
At Home Group Inc.
HOME

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.