At Home Group Inc. (NYSE:HOME) Q2 2020 Earnings Conference Call Transcript

Sep 04, 2019 • 04:30 pm ET

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At Home Group Inc. (NYSE:HOME) Q2 2020 Earnings Conference Call Transcript

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Q & A
Operator
Operator

At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Bradley Thomas with KeyBanc Capital Markets. Please proceed with your question.

Analyst
Bradley Thomas

Good afternoon and thanks for taking my question. I was hoping we could just first talk about some of the recent trends that you've seen in the business, you addressed this a bit in the prepared remarks, Lee, but just curious how your assessment of the state of the industry and the pace of your operations has evolved as you reflect on another quarter that the industry continues to experience some weakness here?

Executive
Lewis L. Bird III

Sure, Brad. What I would say is, the marketplace feels choppier, but that's the same as we saw in Q1. So no change from what we experienced in Q1. The sector is seeing traffic challenges, down 4% in Q2 and which was down 5% in Q1. So what we're focused on is, what we can control. We're determined to get our business back in shape and so we've been put a discerning eye on our business. We've been working on offsets, we've adjusted, as I mentioned, our marketing mix, we outlined and executed already outlining and rolling out a EDLP Plus approach to highlight the great prices we already have, because we are an everyday low price leader. And also to get better sell through on our clearing. We focus on inventory management, we're making progress there and we've been investing in omnichannel and we're excited about the launch of that in Q4.

And as you noticed -- you may have noticed, we've maintained the midpoint of our FY '20 sales outlook, which means our non comp stores and our new stores are outperforming, which says that, we're continuing to drive share and performing with these new stores. And we are targeting positive comps to start in Q4 this year.

Analyst
Bradley Thomas

That's helpful. And then, I want to ask a follow up about the decision to slow the pace of growth. Very clear what you're trying to expect out of this. But I was hoping you can give a little more color around how we should think about what the capex levels may be next year with this slower pace of growth? And what potential benefits, if any, we may see to margins next year, given all the slower pace of growth?

Executive
Lewis L. Bird III

Sure, Brad. I'll start and Jeff will finish on that. We've been analyzing our business and we've spent a lot of time benchmarking our peers. How the high growth retailers set up their business for a sustained growth and profitability, which is our intention as well and we've also been listening and talking to investors. And we clearly see from our benchmarking that investors and more importantly, from our peer group, we're seeing that a more balanced approach is the approach for sustainable high growth retailers. And so by focusing on not only growth and profitability, which we have strong profitability, even in our worst year, we've