At Home Group (NYSE: HOME) reported Q2 EPS of $0.34, $0.01 better than the analyst estimate of $0.33. Revenue for the quarter came in at $288.5 million versus the consensus estimate of $286.5 million.

• Net sales increased 24.3% to $288.5 million from $232.1 million in the quarter ended July 29, 2017 driven by the net addition of 29 stores since the second quarter of fiscal 2018 and a comparable store sales increase of 2.8%.
• We expanded our store footprint by opening nine new stores in the second quarter of fiscal 2019. We ended the quarter with 165 stores in 35 states, which represents a 21.3% increase in store count since July 29, 2017.
• Gross profit increased 33.3% to $97.4 million from $73.0 million in the second quarter of fiscal 2018. Gross margin expanded by 230 basis points to 33.8% from 31.5% in the prior year period primarily due to the nonrecurrence of prior year distribution costs associated with inventory investments as well as product margin improvement. The second quarter of fiscal 2019 also included a modest benefit due to the resolution of a product compliance matter.
• Selling, general and administrative expenses (\"SG&A\") increased 110.0% to $107.6 million from $51.2 million in the prior year period primarily due to $41.5 million of one-time, non-cash CEO stock-based compensation expense, the net addition of 29 stores, and an increase in employee-related expenses that was more heavily weighted in the second quarter of fiscal 2019.
• Adjusted SG&A1 increased 32.3% to $64.2 million compared to $48.5 million in the second quarter of fiscal 2018. Adjusted SG&A1 as a percentage of net sales increased 140 basis points to 22.3% primarily due to the timing of employee-related expense increases, including strategic investments in store-level projects, recruiting and relocation costs incurred to support our growth strategies and stock-based compensation.
• Operating loss of $11.8 million was primarily driven by $41.5 million of one-time, non-cash CEO stock-based compensation expense recognized in the quarter ended July 28, 2018. Operating income was $20.3 million in the second quarter of fiscal 2018.
• Adjusted operating income1 increased 37.4% to $31.6 million from $23.0 million in the second quarter of fiscal 2018. Adjusted operating margin1 expanded by 100 basis points to 10.9% of net sales driven by gross margin improvement partially offset by the timing of employee-related expense increases.
• Interest expense increased to $6.7 million from $5.4 million in the second quarter of fiscal 2018 due to increased borrowings under our revolving credit facility (\"ABL Facility\") to support our growth strategies as well as an increase in interest rates since July 29, 2017.
• Income tax benefit was $8.4 million compared to income tax expense of $5.3 million in the second quarter of fiscal 2018. A pre-tax loss for the period, partially offset by recognition of excess tax benefits related to stock option exercises, impacted our effective tax rate for the quarter ended July 28, 2018.
• Net loss was $10.1 million compared to net income of $9.5 million in the second quarter of fiscal 2018.
• Pro forma adjusted net income1 grew 104.2% to $22.6 million from $11.1 million in the second quarter of fiscal 2018.
• EPS was $(0.16) compared to $0.15 in the second quarter of fiscal 2018. Pro forma adjusted EPS1 grew 88.9% to $0.34 from $0.18 in the second quarter of fiscal 2018.
• Adjusted EBITDA1 increased 33.8% to $50.5 million from $37.7 million in the second quarter of fiscal 2018.

Lee Bird, Chairman and Chief Executive Officer, stated: "As we celebrate two years as a public company, we are very pleased to deliver solid top line results and outstanding profitability for the second quarter of fiscal 2019. Exceptional new store productivity and our 18th consecutive quarter of positive comparable store sales increases drove net sales above our expectations and enabled us to deliver our 17th consecutive quarter of over 20% top line growth. We also significantly expanded gross margin and more than doubled pro forma adjusted net income to $22.6 million while continuing to invest for the long term through strategic in-store projects as well as brand awareness and direct sourcing initiatives. The continued momentum in our business and the customer response to our broad, value-priced offering in both new and existing markets position us well to continue to successfully expand our store footprint and drive sustainable long-term top and bottom line growth."

GUIDANCE:

At Home Group sees FY2019 EPS of $1.27-$1.31, versus the consensus of $1.30. At Home Group sees FY2019 revenue of $1.159-1.164 billion, versus the consensus of $1.16 billion.

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