At Home Group Sinks as First-Quarter View Eclipses Results

(Bloomberg) -- At Home Group Inc. shares plunged on Wednesday after the company forecast first-quarter earnings significantly below market expectations.

The home-decor stores operator forecast first-quarter adjusted earnings of 3 cents to 4 cents a share, compared to the 20 cents average of estimates compiled by Bloomberg. The company also said it expected quarterly sales in the range of $300 million to $305 million, and comparable-store sales to remain flat or increase slightly. Analysts on an average expect sales of $303 million for the period.

Shares of the company fell as much as 25 percent, in its largest ever intraday drop.

“While management’s fiscal 2019 diluted EPS guidance was in line with expectations, the large forecasted fiscal first-quarter miss is cause for concern in our opinion — particularly given management’s tepid comp guidance against a relatively easy year over year comparison,” Loop Capital analyst Anthony Chukumba wrote in a note to clients.

During the earnings conference call with analysts, At Home said it expected gross margin headwinds from the investment in its second distribution center to be the most impactful during the first quarter. It also flagged some retail slowness in the quarter due to unfavorable weather.

While At Home also reported fourth-quarter results on Wednesday, Loop’s Chukumba said they were “nothing to write home about.” The analyst maintained his hold rating and $23 price target on the company.

For the full year, At Home said it expected to generate more than half of its full-year adjusted earnings per share in the fourth quarter.

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Sebastian Silva

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