Plano-based At Home turned the pandemic into its strongest year since it went public in 2016 as Americans continue to decorate, organize their homes and spend time in their kitchens.
That momentum is continuing in early 2021 with “tailwinds of strong home sales, nesting and de-urbanization” putting the chain of 225 stores in 40 states in a good position to continue to gain market share, At Home CEO Lee Bird said.
The company’s ability to crank up its e-commerce and expand that business has been helped by delivery partnerships, Bird said. The biggest one is with Plano-based Pickup, which handles larger items such as rugs and furniture and uses its platforms to arrange smaller deliveries through Postmates and others.
Pickup is now providing local deliveries for more than 70% of At Home’s stores, and the two local companies are feeding off each other’s growth.
Those partnerships were “critical to serving our customers during a busy holiday season,” Bird said. “It’s a differentiator for us. Now more than ever, a larger number customers are buying closer to need.”
Next-day-delivery charges begin at $10, and, depending on when customers make the purchase, merchandise often arrives the same day. Bird said Pickup determines the delivery fees.
Pickup has expanded its business to more than 80 markets in almost every major city and state to support At Home stores and other retailers, said Brenda Stoner, CEO of Pickup.
“We’re like a leading economic indicator. March retail sales are going to be strong,” Stoner said. “We’re in a perfect storm of demand being up, stimulus checks out and a feeling of post-pandemic euphoria.”
At Home stores were just beginning to offer in-store pickup of online purchases before the pandemic hit, and that has also generated sales increases, Bird said.
At Home reported that sales were up 41.3% to $562 million in the holiday quarter that ended in January and that the company swung from a loss a year earlier to a profit of $72.7 million. Same-store sales increased 31% from the holiday quarter a year earlier.
Real estate prospects are also good, Bird said. The retailer has opened seven of the 15 stores it plans to open this year. Its stores are about 85,000 square feet, and the company has figured out creative ways to get into shopping centers that don’t have a big box to offer.
A store that just opened in Oklahoma City was made from three smaller contiguous store spaces that were vacant. “We approached the landlord with the idea,” Bird said. The company is still looking for a location “inside LBJ,” he said. At Home has 11 stores in Dallas-Fort Worth but none in the Dallas city limits.
Bird still thinks the company can reach 600 stores. With each store generating revenue of $10 million, the company has the potential to reach annual sales of $6 billion.
“We have never been more confident in our customer value proposition, competitive positioning and our ability to capture this large opportunity ahead,” Bird said.
At Home shares are up 70% from a year ago even after a 16% decline on Wednesday, when they closed at $25.94 a share after the company declined to provide a specific outlook, citing the unprecedented and continued uncertainty related to COVID-19.
For the year, At Home sales increased 27.3% to $1.74 billion, and the company had a $149.7 million loss from one-time accounting charges to write down assets. It ended the year with $125.8 million in cash and no borrowings from its $312 million credit line. It lowered long-term debt by $20 million to $314.3 million.
Same-store sales were up 19.4% in 2020.