At Home : Third Quarter – Fiscal 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 24, 2020

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-37849

AT HOME GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	45-3229563
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1600 East Plano Parkway
Plano, Texas	75074
(Address of principal executive offices)	(Zip Code)

[phone]

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HOME	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Smaller Reporting Company	☐	Emerging Growth Company	☐

Non-Accelerated Filer

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

There were 64,807,011 shares of the registrant's common stock, par value $0.01 per share, outstanding as of November 30, 2020.

AT HOME GROUP INC.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

PART I - FINANCIAL INFORMATION

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39
Item 1.	Legal Proceedings.	40
Item 1A.	Risk Factors.	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	44
Item 3.	Defaults Upon Senior Securities.	44
Item 4.	Mine Safety Disclosures.	44
Item 5.	Other Information.	44
Item 6.	Exhibits.	45

Item 1.

Condensed Consolidated Financial Statements.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk.

Item 4.

Controls and Procedures.

PART II - OTHER INFORMATION

Page

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "might", "plan", "potential", "predict", "seek", "should" or "vision", or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which we operate, our expected new store openings, our real estate strategy, growth targets, potential growth opportunities, market share, competition, impact of expected stock option exercises and future capital expenditures, estimates of expenses we may incur in connection with equity incentive awards to management and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this report are forward-looking statements. Furthermore, statements contained in this document relating to the global pandemic of the novel coronavirus disease ("COVID-19"), the impact of which on our financial results remains inherently uncertain, are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, including the important factors described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended January 25, 2020 as filed with the Securities and Exchange Commission ("SEC") on May 19, 2020 and as updated in "Item 1A. Risk Factors" herein, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to:

• ● general economic factors that may materially adversely affect our business, revenue and profitability;

• ● outbreaks of communicable disease, or other public health emergencies, such as the current global pandemic of COVID-19, could substantially harm our business;

• ● resurgence of COVID-19 cases and reinstatement of state or local mandates to contain or prevent the spread of disease, including those requiring store closures;

• ● volatility or disruption in the financial markets;

• ● consumer spending on home décor products which could decrease or be displaced by spending on other activities;

• ● our ability to successfully implement our growth strategy on a timely basis or at all;

• ● our failure to manage inventory effectively and our inability to satisfy changing consumer demands and preferences;

• ● losses of, or disruptions in, or our inability to efficiently operate our distribution network;

• ● risks related to our imported merchandise, including current or any additional imposition of tariffs or other trade restrictions;

• ● adverse events, including weather impacts, in the geographical regions in which we operate;

• ● risks related to our use of international vendors, including potential violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws;

• ● risks associated with leasing substantial amounts of space;

• ● risks associated with our sale-leaseback strategy;

• ● the highly competitive retail environment in which we operate;

• ● opening new stores in existing markets, which may negatively affect sales at our existing stores;

• ● risks related to our substantial indebtedness and the significant operating and financial restrictions imposed on us and our subsidiaries by our secured credit facilities;

• ● our dependence upon the services of our management team and our buyers;

• ● the failure to attract and retain quality employees;

• ● difficulties with our vendors;

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• ● the seasonality of our business;

• ● fluctuations in our quarterly operating results;

• ● the failure or inability to protect our intellectual property rights;

• ● risks associated with third-party claims that we infringe upon their intellectual property rights;

• ● increases in commodity prices and supply chain costs;

• ● the need to make significant investments in advertising, marketing or promotions;

• ● the success of any investment in online services or e-commerce activities that we may launch;

• ● changes in consumer buying patterns, particularly the use of e-commerce sites and off premise sales, which may affect our revenues, operating results and liquidity;

• ● risks associated with executing and optimizing our omnichannel initiatives;

• ● impairment charges could have a material adverse non-cash impact on our results of operations;

• ● the success of our loyalty program or private label or co-branded consumer credit offerings and any investments related thereto;

• ● disruptions to our information systems or our failure to adequately support, maintain and upgrade those systems;

• ● unauthorized disclosure of sensitive or confidential customer information;

• ● regulatory or litigation developments;

• ● risks associated with product recalls and/or product liability, as well as changes in product safety and other consumer protection laws;

• ● inadequacy of our insurance coverage;

• ● our substantial dependence upon our reputation and positive perceptions of At Home;

• ● the potential negative impact of changes to our accounting policies, rules and regulations;

• ● changes to the U.S. tax laws and changes in our effective tax rate;

• ● the significant amount of our common stock held by certain existing stockholders;

• ● the impact of charges relating to impairment of goodwill and other assets;

• ● competition among our stores located in the same geographic region; and

• ● other risks and uncertainties, including those listed under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended January 25, 2020 as filed with the SEC on May 19, 2020 and "Item 1A. Risk Factors" included in this Quarterly Report on Form 10-Q, and in other filings we may make from time to time with the SEC.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this report are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this report, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this report.

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