At Home Group Inc. (NYSE:HOME) Q2 2021 Earnings Conference Call - Final Transcript

Sep 01, 2020 • 04:30 pm ET

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At Home Group Inc. (NYSE:HOME) Q2 2021 Earnings Conference Call - Final Transcript

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Presentation
Executive
Arvind Bhatia

Relations page of the website at investor.athome.com. In addition, from time-to-time, At Home expects to provide certain 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?

Executive
Lewis L. Bird III

Thank you, Arvind. Good afternoon, everyone. Thank you for joining us to discuss our results for the second quarter fiscal 2021. We're pleased to deliver the best quarter in the company's history in terms of comp, profitability and free cash flow. We also ended the quarter with the lowest leverage ratio since our IPO. As you know, we've pre-announced record preliminary Q2 results at the end of July. Our final comps of 42% and total sales of $515 million or up 51%, were in line with the pre-announcement.

As previously mentioned, we believe our sales increased at a rate significantly faster than the industry, and our market share was up meaningfully during Q2. We're also pleased that for the second consecutive year, we ranked number eight on the National Retail Federation's recently released Hot 100 Retailers list. This is the fourth year in a row we have appeared on that list. Q2 adjusted EBITDA of $160 million and net income of $89 million were ahead of our preliminary expectations. Our leverage ratio at the end of Q2 of 1.4 times was slightly lower than our pre-announced estimate due to better-than-expected adjusted EBITDA.

In addition, as Jeff will elaborate in his prepared remarks, we have recently completed a debt refinancing that provides us financial flexibility and addresses a key investor concern about our debt maturity. As we look forward, our goal continues to be to provide enhanced level of transparency and accessibility to our investors during these unprecedented times.

In terms of Q3, our quarter-to-date trends have remained strong, comps are relatively in line with Q2 and have been consistent throughout the month of August. Similar to Q2, the strength is geographically broad and both everyday and seasonal categories are performing well. However, between the two, everyday is outperforming as we are not inventory constrained in that category.

We're pleased with our back-to-campus business, which has so far generated comps well above the overall company average during the same period. We refined our back-to-campus strategy this year and it's paying off. Our merchant team targeted not only back-to-campus shoppers, but also young shoppers in their late teens to late 20s, looking to refresh their bedroom, dorm room, first off-campus apartment or first apartment after graduation. This holistic approach has been very effective in the current environment when a significant number of students are attending college remotely. We offered a broader and deeper back-to-campus assortment this year and put greater emphasis on value. We focused not just on the decorative theme, but also in textiles and storage. We also offered a limited edition collection with a broad range of styles appealing to both back-to-campus shoppers and everyone looking to update their living spaces.

Within seasonal, Halloween and fall are off