At Home Group Inc. (NYSE: HOME) on June 18, 2020, has announced its earnings for the first quarter of fiscal 2021 which ended on April 25, 2020. The Chairman and Chief Executive Officer, Lee Bird, has said that during the pandemic the company has focused on ensuring the safety of its customers’ and team members, the company primarily focused on financial stability and preserving liquidity to ensure the company’s long term business viability, the company had to close its stores when the pandemic was escalating which impacted its sales. Further, he added that the sales were up by double digits after reopening its stores, as the local mandates were lifted in early May and ensure that the company is well-positioned for the long run.
- Revenue: The Revenue for the Q1 fiscal 2021 was $189.84 million which has decreased by 38% compared to $306.2 million in Q1 fiscal 2020 (Y-o-Y).
- Cost of Sales: The Cost of sales for Q1 fiscal 2021 was $173.49 million which has decreased by 20.4% compared to $218.21 million in Q1 fiscal 2020 (Y-o-Y).
- Gross Profit: The Gross profit for Q1 fiscal 2021 was $16.3 million which has decreased by 81.4% compared to $88.05 million in Q1 fiscal 2020 (Y-o-Y).
- Gross Margin: The Gross margin for Q1 fiscal 2021 was 8.6% which has decreased compared to a gross margin of 28.75% in Q1 fiscal 2020.
- Operating Expenses: The Total operating expenses for Q1 fiscal 2021 was $388.41 million which has increased compared to $78.69 million in Q1 fiscal 2020. The increase was primarily due to the goodwill impairment cost of $319.73 million. The SG& A expenses decreased by 13.6% from $76.9 million in Q1 fiscal 2020 to $66.5 million in Q1 fiscal 2021 which was due to a reduction in office and store level labour and other expenses.
- Operating Income/ Loss: The loss from operations for Q1 fiscal 2021 was $372.06 million compared to an operating income of $25.9 million in fiscal 2020 this was mainly due to store closures and goodwill impairment charges incurred by the business.
- Net Income/ Loss: The net loss for Q1 fiscal 2021 was $ 9 million compared to a net profit of $13.8 million in Q1 fiscal 2020.
- Earnings / Loss per Share: The Company has incurred a loss per share of $ 5.60 per share in Q1 fiscal 2021 compared to earnings per share of $0.22 per share in Q1 fiscal 2020.
The Company has a long term debt of $334.17 million in Q1 fiscal 2021 which has reduced by 2 basis points compared to $334.25 million in Q1 fiscal 2020 (Y-o-Y). The Company also has a short term debt of $429.09 million in Q1 fiscal 2021 which has increased by 48% compared to $288.98 million in Q1 fiscal 2020 (Y-o-Y). The company in Q1 fiscal 2021 has total cash of $43.64 million compared to total cash of $12.08 million in Q1 fiscal 2020. The Inventories in Q1 fiscal 2021 was $406.97 million which has decreased by 2.5% compared to $417.7 million in Q1 2020. The Shareholder’s equity for Q1 fiscal 2021 was $251.7 million which has reduced by 58% compared to $608.6 million in Q1 fiscal 2020 (Y-o-Y).
Cash Flow Highlights
The Net cash generated from operating activity for Q1 fiscal 2021 was negative $55.20 million compared to positive cash flow of $1.16 million in Q1 fiscal 2020. The cash flow from investing activity was negative $19.23 million for Q1 fiscal 2021 which is due to the purchase of property and equipment (Capital expenditure). The cash flow from financing activity was positive $105.99 million for Q1 fiscal 2021 which has increased compared to positive cash flow of $19.98 million in Q1 fiscal 2020.
The Company has about 218 operational stores across 39 states at the ended of Q1 fiscal 2021 which includes 6 new stores opened during the quarter, the company has reportedly opened net 27 stores since Q1 fiscal 2020 which is a 14.1% increase. The comparable store sales declined by 46.5% in Q1 fiscal 2021 compared to a decline of 0.8% in Q1 fiscal 2020 which was an effect of the pandemic environment. The as of April 25, 2020, has about $342 million outstanding under its $425 million ABL (Asset-Backed Leverage) credit facility and the company has issued $1 million of letter of credit and has about $44.1 million available for any further issue if needed.
The stock price of the company traded lower -3% after the earnings report and closed, the stock is recovering it lost market share in the past 6 months after falling to its 52-week low price of $1.20, as of yesterday the stock has risen by 4.72% closing at a price of $7.77 per share.