At Home Group registered an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No terms were given in the filing, but the offering is valued up to $100 million, although this number is usually just a placeholder. The company intends to list on the New York Stock Exchange under the symbol HOME.
The underwriters for the offering are Merrill Lynch, Goldman Sachs, Jefferies, Morgan Stanley, Evercore ISI, William Blair, Guggenheim Securities and Stifel.
This company is the leading home decor superstore, based on the number of its locations and large format stores, which it believes dedicate more space per store to home decor than any other player in the industry. At Home is focused on providing the broadest assortment of products for every room, in every style at everyday low prices. The company utilizes its space advantage to out-assort the competition, offering over 50,000 stock-keeping units (SKUs) throughout the stores.
At Home’s differentiated merchandising strategy allows it to identify on-trend products and then value engineer those products to provide desirable aesthetics at attractive price points for customers. Over 70% of net sales are represented by products that are unbranded or private label.
The current store base includes 111 locations across 28 states and 64 markets, averaging over 120,000 square feet per store. The company utilizes a flexible and disciplined real estate strategy that allows it to successfully open and operate stores from 80,000 to 200,000 square feet across a wide range of formats and markets. All of its stores that have been open since the beginning of the year are profitable, and stores that have been open for more than a year average over $6 million in net sales and realize average store-level adjusted EBITDA margins of 28%.
In the filing, the company listed some recent financial highlights:
- Positive comparable stores sales in the last nine consecutive fiscal quarters, averaging 5.6% growth over the period.
- Eight consecutive fiscal quarters of over 20% year-over-year net sales growth.
- Opened 59 new stores in the past five fiscal years, including 20 in fiscal year 2016.
- Total net sales growth from $364 million in fiscal year 2013 to $653 million for fiscal year 2016, representing a compound annual growth rate of roughly 20%.
The company plans to use the net proceeds from the offering to repay its indebtedness, as well as for general corporate purposes.