Greetings and welcome to the At Home Fourth Quarter Fiscal Year 2021 Earnings Call Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Arvind Bhatia, Vice President of Investor Relations. Thank you, sir. You may begin.

Good afternoon, everyone, and thank you joining us today for At Home’s fourth quarter fiscal year '21 earnings results conference call. On the call today are Chairman and Chief Executive Officer, Lee Bird; President and Chief Operating Officer, Peter Corsa; Chief Merchandizing Officer, Chad Stauffer and Chief Financial Officer, Jeff Knudson. After the team have made their formal remarks, we will open the call to questions. Before we begin, I need to remind you that certain comments made during this call may constitute forward-looking statements within the meaning of the Federal Securities Laws. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause our actual results or performance to differ materially from such statements. Known risks and uncertainties are referred to in At Home’s press release issued today and in our SEC filings, including our Annual report on Form 10-K and subsequent reports. The forward-looking statements made today are as of the date of this call or other specified dates and At Home does not undertake any obligation to update any forward-looking statements, except as required by law. Any discussion during this call of our results for the current quarter today are subject to variability and may not be indicative of our results or trends for any full reporting period. Finally, the speakers may refer to certain non-GAAP financial measures on this call. A reconciliation schedule showing the comparable GAAP versus non-GAAP financial measures is available in At Home's press release issued today. If you do not have a copy of today's press release, you may obtain one by visiting the Investor Relations page of the website at investor.athome.com. I will now turn the call over to the Lee. Lee?

Thanks, Arvind, and thank you all for joining us today. Before we share our Q4 results with you, I want to take a moment to thank our nearly 7,700 team members for their continued dedication and hard work despite unprecedented challenges this past year. Their resilience was critical in helping us deliver a record year, while remaining focused on our highest priority of protecting the health and safety of our team members and customers. Turning to the results, I'm extremely pleased with our record Q4 performance and the continued momentum in our business. Comp store sales of nearly 31% were well ahead of our increased expectations of 23% to 24%, due to acceleration of our business in January. Our new and non-comp stores also continued to perform well on all key metrics. As a result of upside in sales and strong flow through to the bottom line, we delivered pro forma adjusted EPS of $1.08 and adjusted EBITDA of nearly $120 million, well ahead of consensus expectations. Financially, we're in our strongest position ever as a public company ending the quarter with more than $125 million in cash, nothing drawn on our ABL facility and a record low leverage ratio of 0.5 times, down from 3.2 times a year ago. Consistent with the last several quarters, our outstanding Q4 performance is broad-based in terms of departments, geography, and age of stores and it was driven by strong growth in both traffic and ticket. Within our everyday business, all departments comped solidly positive as shoppers continued to decorate, organize their home, and spend time in their kitchen. Q4 comps in wall decor, textiles, accent décor, and furniture, home organization and kitchen entertainment were well above company average. Seasonal comps exceeded expectations despite inventory constraints as we sold through nearly 90% of Christmas product at full price compared to our typical 70%, leading to the most profitable Christmas season in our history. Geographically, all districts were strong and overall performance across our newer and older stores were consistent, including stores older than five years. As I mentioned during January, we experienced an acceleration in our business. We believe this was driven by a combination of factors, including the benefit of a second stimulus, our more expansive Bed Bath & Storage EDLP Plus event, and success in replenishing inventory in the face of supply challenges. Strong early sell through of our spring seasonal merchandise was also a small contributor to January's outperformance, and an encouraging indicator of our continued growth in fiscal 2022. We remain excited about the success we are driving in our redefined go-to-market approach. Our EDLP Plus campaigns continue to highlight At Home sharper pricing and value proposition, while category reinvention and collaborations showcase newness and freshness. Our growing Omni channel business is also offering more convenience for our customers. We offer BOPIS and curbside in all of our stores, and local delivery for more than 70% of our stores. The expanded delivery partnership with PICKUP, including Postmates, is progressing well and was critical to serving our customers during a busy holiday season. Before I turn the call over to Chad, I want to quickly talk about trends in the ongoing first quarter. January's momentum has continued into fiscal 2022. We are off to a very strong start and see potential for Q1 comps of 142% to 153%. Obviously, we have easy comparisons due to mandated store closures in Q1 last year, but even on a two-year basis, our top trends have accelerated from the fourth quarter. Jeff will provide additional colour on sales and profitability expectations later in his prepared remarks. Last quarter, I mentioned how our Chief Merchant [ph], Chad Stauffer, and his team are striking the right balance between art and science and merchandising. I'm pleased to have Chad on the call this afternoon to share his thoughts on the factors driving our success and the significant opportunity in front of us. Following Chad's comments, our President and Chief Operating Officer, Peter Corsa, will provide an update on our operational initiatives before turning the call over to Jeff for a few financial highlights. Chad?

Thank, Lee. Good afternoon, everyone. I'm delighted to be on the call today to speak about the incredible strides we've made in all areas of merchandising. Over the past two years, we've significantly elevated our merchant organization through a series of focused investments. We've kept our customers at the center of our business and enhanced our capabilities to better meet their needs. We couldn't be prouder of our more disciplined and sustainable approach. As the leading value retailer of home decor, we know that our customer sees value at the intersection of three things; a broad assortment, unique product, and the best prices. Person [ph] is three legged stores of our assortment. We are focused on making sure our customer is familiar with the unbeatable breath that we offer. We out-assort other home decor stores with up to 50,000 items across 15 departments. For instance, we carry 55 different colors and patterns of patio cushions in 17 different shapes and sizes, and we carry more than 1,800 different bedding products and nearly 1,300 different wall decor SKUs in store. Through our EDLP Plus campaigns, we are encouraging our customers to cross shop additional departments. As we look back on the first year of these events, we're analyzing the results and refining our approach in fiscal '22. There are some events, that means telling more inclusive stories and expanding the category focus where appropriate. For instance, we pivoted last spring's Bed & Bath Event to a Bed, Bath, & Storage Event this January that drove even stronger financial outcomes. Bringing the customer truly unique products is the second leg. We refocused our product trend and merchant teams on building cross categories themes and trends, revived our discipline around reinvention, execution, and developed new collaborative relationships. Our fourth quarter everyday category reinvention such as kids bedding, healthy home in Campbell, comes nearly twice the company average, continuing a positive trend and proving that our reinvention engine is working well. During Q1, we are focused on two key reinventions, while our in-home office and quarter-to-date results are promising. We have completely revamped our wall art department by creating lifestyle sets, improving the fixtures, expanding the space for large art and merchandising by colour to improve customer shopability. We have also launched several brand new home office collections in a variety of styles. Our collaborations, which are multi-year rotating partnership with brands and designers, continues to be very important for us. These collaborations encompass a variety of seasons, styles and rooms within our assortment. We highlighted traditional collections with rising home decor, media star, Grace Mitchell, and iconic toy brand, FAO Schwarz in the fourth quarter launched an exclusive collection with London Fashion Designer, Tracy Boyd in February, inspired by art, travel, adventure and the patterns of Japan, and look forward to sharing the exciting details of a collaboration with a world class athlete and TV host this fall. The third and final leg is having the best prices. We established an in-house team to ensure our price leadership across categories and key items, increasing both the discipline and frequency of our pricing analysis. During Q4, we offered lower opening price points in several key departments, which was instrumental in driving comps as well as lower markdowns. Our team is laser focused on both serving our customer and driving our business through sharp everyday low prices. As we turn the page to fiscal '22, we remain focused on striking the right balance between the art and science of merchandising. From an art standpoint, we're incredibly enthusiastic about our assortment this year. On the seasonal front, we've already seen strong performance from our new patio collections, which were coordinated with outdoor decor themes to enable customers to easily pull together a cohesive patio space. On the science side of the house, we are confident that our progress in pricing, sourcing, inventory management and SKU rationalization will continue to enhance financial returns for the business. For context, when I joined At Home nearly three years ago, our internal sourcing team was comprised of a handful of people. Since then, we have added bandwidth and deepened our capabilities, accelerating from practically no direct sourcing in fiscal '18 to 15% of our assortment at the end of fiscal '20, and nearly 20% today. In addition to 100s of basis points of margin improvement on each item source directly, we are able to create a more agile supply chain which allows us to diversify country risk, drive product quality and improve speed to market as we work toward our longer-term goal of direct sourcing 30% of the assortments. Our inventory management capabilities have followed this similar trajectory. We know that best-in-class retailers have unbelievable planning organizations, and we have been building and strengthening those skills within At Home. We have improved the synergy between the planning and buying functions. Our dedication to these capabilities enabled us to flex our planning muscle like never before this past year, including during periods of unprecedented sales, which has positioned as well as we enter fiscal 2022. Finally, we're exhibiting At Home's company values of being smart and scrappy, through our SKU rationalization and Edit to Amplify strategy. Our stores may be the largest one stop shop for home decor. But it's important that each of our items has a clear purpose for our customer and drive optimal financial outcomes for our business. We are analyzing each category and eliminating less productive SKUs, reinvesting those inventory dollars into higher sell-through items and big ideas, while still maintaining the impressive selection we're known for. Over time, this effort should improve inventory turns and generate better return on working capital. We began this effort in fiscal '21 with four out of our 15 departments and have already seen outsized comps in those areas. We plan to tackle another four to five departments this year, slightly reducing our total SKU counts. I hope you can sense how excited and proud I am of the journey we've been on as a merchant organization and where we are today. From the very beginning, our vision has been to become a more vertically integrated home decor category killer. With our strengthening capabilities and trends and product development, pricing sourcing, inventory planning and allocation, we are well on our way to realizing that vision. Retail is truly a team effort, so we are also incredibly grateful to the operations and field teams for helping to execute our vision in these stores every day. I'd like to turn the call over to Peter Corsa, President and COO to talk through some of our operational developments. Peter?

Thanks, Chad. Good afternoon, everyone. First off, I'd like to say thank you to our team members in the stores, distribution centers and home office for delivering a truly incredible year for At Home. We are so proud of our field leadership for navigating through unprecedented and challenging variables in fiscal '21. They implemented safety precautions that enabled us to reopen as soon as local regulations allowed. Rolled out omni-channel options for our customers at lightning speed, and executed EDLP Plus events and reinventions that drove outsized results. Their ability to adapt on a daily basis while staying focused on our key strategic priorities has been a driving force behind our record results. As you may remember, we typically flex our store labor to support both inventory flow and customer facing activities. We maintained that philosophy while improving our inventory position and delivering more than 30% comp sales growth in each of the last three quarters. As a result, our stores are well staffed, clean and organized while continuing to implement COVID safety protocols. Customer satisfaction and Net Promoter scores have continued to increase. In addition, despite high levels of product flowing through our supply chain and onto the sales floor, our shrink rates have remained very low, thanks to the process improvements we made in 2019. In fact, our labor productivity rates and freight processing times at both the stores and the distribution centers are the best we've ever seen. In recognition of such impressive teamwork and resilience helping us to drive record results, we're delighted to have paid out record bonuses for fiscal' 21. Turning to fiscal '22, our biggest area of focus is the current international supply chain environment. As you know, for the past several months, consumer driven industries have faced equipment shortages and shipping delays related to COVID disruption, and a global increase in demand for goods. In turn, these constraints have significantly inflated freight costs for importers. We have been working closely with our transportation partners to help us navigate these challenges. We started by proactively adjusting our rate structure to move our shipments through the supply chain faster and support our extraordinary sales growth. As a result, our backlog rates are well below industry average. We have been prioritizing key items and seasonal product for our patio and garden assortment, as well as items related to our visual merchandising and marketing initiatives to help ensure the success of planned campaigns. We have also invested in store labor to help speed incoming product to the sales floor. And our distribution centers are operating at peak efficiency turning around freight in less than 24 hours. These efforts have enabled us to not only replenish inventory, but build our position despite continued shipping delays. In fact, we have been one of the top 40 importers in the U.S. for the past few months, based on substantial cube volume we utilize. We have a high-class problem, with net sales growth above 40% in each of the last three quarters, there is record demand for our products. But, because we are far exceeding our contracted volume, securing the product to satisfy the demand comes at a higher cost. While the current constraints in the global supply chain are beyond our control, I am extremely proud of how our team is managing and mitigating to the best of our ability. Our success is reflected in our ability to support the accelerating top-line momentum we are seeing in the first quarter. We are in the process of negotiating our annual transportation contracts and the new rates will become effective May 1. While it is difficult to predict the timing, we do expect freight costs will eventually normalize from the current elevated levels. With that, I'll turn the call over to our CFO, Jeff Knudson, to provide a financial update.

Thank you, Peter, and good afternoon, everyone. I'm pleased to share a few financial highlights from our record Q4 results. As reported, net sales for the quarter were $562 million or up 41.3%. Adjusted net income of $72.6 million and pro forma adjusted EPS of $1.08, nearly tripled from the year ago period. Adjusted EBITDA grew 94% to $119.6 million, and we generated free cash flow of more than $85 million during the quarter. As Lee mentioned, comp sales were well ahead of our pre announcement in early January and flow through to the bottom line was also very strong, which led to the significant earnings upside. As a reminder, the fourth quarter of fiscal '21 included in additional week versus fiscal '20. The extra week contributed $31.4 million in sales and generated an estimated $15.9 million in gross profits and $4.3 million in SG&A expense. As a result, we estimate the extra week contributed $11.6 million in adjusted EBITDA, and $0.14 in EPS. While the earnings released we issued this afternoon mostly reports our key metrics for the 14 and 53-weeks ended January 30, for ease of comparisons, I'm going to highlight a few key items on a 13 and 52-week basis. Q4 comps were 30.8% and total sales increased 33.4% to $530.6 million for the 13-week period. We estimate that Q4 gross profit was up 77.5% and gross margin increased 950 basis points to 38.2% on a 13-week basis. Consistent with the improvement in Q3. Approximately 450 basis points of the improvement was driven by product margin expansion, as we benefited from a higher mix of full price selling and reduced markdowns in both our everyday and seasonal departments. Occupancy and depreciation expense leverage on record fourth quarter sales growth, and lower outbound freight costs drove the remaining gross margin improvement. Mandated store closures related to COVID-19 reduced our inventory flows in the first-half of the year, reducing the outbound freight expense we recognized in the third and fourth quarters. As a reminder, freight expense impacts cost of goods sold as inventory turns. And based on our turns, there's typically a two quarter lag in the timing of when these costs hit our P&L. By the same token, increased inventory flow to support record demand, coupled with higher freight rates in the latter part of fiscal '21 and so far into Q1 will impact our P&L in fiscal '22. I'll shed more light on this momentarily. Q4 adjusted SG&A was an estimated $111.5 million or 21% of sales on a 13-week basis. This included slightly more than $5 million in performance based incentive compensation above the normal run rate, reflecting are incredibly strong year. Relative to Q4 last year, our adjusted SG&A ratio increased 240 basis points driven by higher incentive compensation and advertising expenses, partially offset by operating leverage on our strong sales performance. Within adjusted SG&A, store labor was approximately 7.2% of sales, in line with the full year and advertising was approximately 3.5% of sales, compared to 2.5% for the full year. Turning to the full fiscal year, as reported net sales of $1.74 billion, were up 27.3% over fiscal '20, and adjusted net income was $173.6 million. Pro forma adjusted EPS was $2.68 as much as the prior three years combined. Looking at some of the key metrics on a 52-week basis, fiscal '21 comps were 19.4% and net sales increased 25% to $1.7 billion. While we benefited from a wave of industry growth last year, we believe the strong execution of our At Home 2.0 strategy helped us gain meaningful market share, especially since fully reopening in June. On an estimated 52-week basis, gross profits were up 51% and gross margins increased 590 basis points to 34.3%. Occupancy, depreciation and distribution center expense leverage on record comps, along with lower outbound freight and distribution center costs drove approximately 400 basis points of improvement. Product margin expansion as a result of a higher mix of full price selling accounted for the remaining increase in full year gross margin. On a 52-week basis, adjusted SG&A expense was up 14.1% year-over-year and adjusted SG&A as a percent of sales was down 190 basis points to 20.1%. The improvement in adjusted SG&A as a percent of sales was a result of reduced preopening expenses, as we temporarily pause new store openings at the onset of the pandemic, lower advertising costs as we pulled back on advertising during the time our stores were closed, and expense leverage on full year revenue growth of 25%. This improvement was partially offset by higher incentive compensation, reflecting our record performance. For the full year, adjusted operating margins improved 780 basis points to 13.7%, and adjusted net income margins improved 700 basis points to 9.7% on an estimated 52-week basis. Adjusted EBITDA, excluding an estimated $11.6 million contribution from the extra week, was $347 million or up 98%. This included approximately $24 million of net benefit from rent deferrals and rent abatements related to COVID-19, $16 million of which will reverse in fiscal ‘22. During fiscal ’21, we drove a significant transformation of our balance sheet, by delivering record free cash flow and refinancing our long-term debt. For the full year, we generated $383 million of free cash flow compared to a use of $18 million in fiscal ‘20, a more than $400 million improvement year-over-year. To put this in context, heading into fiscal ‘21, we were targeting modestly positive free cash flow. This strong free cash flow generation helped us lower our net debt position by nearly $370 million, and improved our leverage ratio to a record low 0.5 times versus 3.2 times a year ago. We ended the year with $126 million in cash, more than 10 times our cash balance at the end of fiscal ’20, $319 million in long and short-term debt and no outstanding balance on our ABL revolving credit facility. In addition, we own nine properties that can be monetized over time through sale leaseback transactions. For reference, over the last two fiscal years, we've sold 12 properties for an average of $13 million per site. From an inventory standpoint, we continue to improve our position. Total inventory at the end of Q4 was down 13% year-over-year, compared to down 20% at the end of Q3 and 30% at the end of Q2. Despite supply chain congestion and stronger than expected sales momentum, we have been able to replenish inventory at a faster pace than we're selling it to meet demand. Our inventory turns improved meaningfully during fiscal ’21, as we continue to put greater emphasis in this area and leverage our enhanced planning and allocation capabilities. Looking forward, we are not providing formal guidance for the full year, given the continued uncertainty related to COVID-19. However, with more than half of Q1 behind us and the challenge of modelling against the unusual backdrop of store closures in Q1 last year, we are providing a little bit of colour on how we expect the quarter to play out. We do not expect to resume a formal full year outlook in the near future. As Lee mentioned, Q1 is off to a fantastic start. Based on quarter-to-date performance and expected trends for the rest of Q1, we believe we can achieve comps of 142% to 153%. This would be an acceleration in comp trends on a two year basis relative to the two year trend in Q4. We expect Q1 net sales of $450 million to $470 million versus $189.8 million in the year ago period. The midpoint of the range would imply net sales growth of 50% over a two year period, including store growth of 18% over the same two year period. For modelling purposes, keep in mind that because of mandated store closures during the first quarter, Q1 comp store dollars were only 10% of our comps for all of fiscal ‘21. In terms of profitability, we believe Q1 adjusted operating income could be in the range of $55 million to $63 million, representing adjusted operating margins of approximately 12% to 13%. As you think about the longer-term margin profile of At Home, I wanted to provide some historical context. Based on the new lease accounting standards, our adjusted operating margins were 9.5% in fiscal ’19, 5.9% in fiscal ’20 and 13.7% in fiscal ’21 on a 52-week basis. With 19% comps in fiscal ’21, we drove more than 450 basis points of operating leverage, leading to outsized margins. On the other hand, in fiscal ‘20, with comps down slightly, our adjusted operating margins were below historical levels. Therefore, we tend to think of fiscal '19, 9.5% as more representative of the underlying margin profile of the business. With respect to fiscal year '22, given our incredibly strong start to the year and accelerating momentum, we would have expected fiscal '22 adjusted operating margins to be well above fiscal year '19. However, as Peter mentioned, near term we have a high-class problem. There's record demand for our business, but also incremental freight cost to bring in products to support this demand. As a team, we have worked hard and identified several offsets to the freight headwinds Peter described. Overall, based on everything we know today, our best thinking is that adjusted operating margins for fiscal '22 could be approximately 9%. In terms of phasing, given the two quarter lag from when we ship product to when these costs hit our P&L, we expect the impact of incremental freight costs to be greater in the back-half of the year compared to the first-half. All other things being equal, once the freight headwinds subside, we would expect our margin trends to normalize. Overall, we couldn't be more pleased with the continued momentum in our business, and we look forward to delivering another year of strong financial performance. With that, I'll turn the call back to Lee.

Thanks, Jeff. Our extraordinary success this past year despite unprecedented challenges and uncertainty has demonstrated the resilience of both our business model and our team. We delivered incredible sales volume, posted three of our biggest ever quarterly comps, generated significant positive free cash flow, and earned our largest profits to date. We had record sell through on our Christmas, fall and Halloween product, ending the year in a very clean inventory position. We grew our loyalty members by over 40% to over 9 million, successfully launched our omni-channel capabilities in opened seven new stores during the year. These would have been remarkable achievements in any year, but hold special significance given the difficult environment and the limited visibility we had for much of the year. We do look forward to fiscal 2022, we are highly competent in our strategies to propel us forward. We're acutely focused on three key areas, customer acquisition and retention, optimizing our inventory position, and the enhanced execution of our At Home 2.0 strategy. Over the last couple of quarters, we have experienced a step function increase in our customer base. These new customers have rated us higher than even our returning customers, like KPIs such as product quality and value. Net promoter scores and satisfaction are equally strong among new and existing customers. Meanwhile, our Insider Perks loyalty program, which was recently named as one of the top loyalty programs in the country by Newsweek continues to see very strong growth. We added a record 2.6 million members to Insider Perks during fiscal' 21. Insider Perks members continue to have deeper engagement with us, and a meaningfully bigger basket size than non-perk members. These factors when combined, give us increased confidence in the ability to retain our customer base. At the same time, we plan to drive additional new customer growth through our brand building and acquisition advertising strategy. At Home's unaided brand awareness increased steadily during fiscal '21, and in Q4 was up a strong 400 basis points year-over-year, a good indication of our increased relevance with home decor shoppers. Given the unprecedented level of competitors store closings, and the billions of dollars in business up for grabs, our targeted acquisition marketing efforts are also beginning to bear fruit. Our second focus is optimizing our inventory position, especially in seasonal categories. You may recall that our seasonal business was severely inventory constrained in the back-half of last fiscal year. In fact, our Q4 seasonal comp while healthy were more than 30 points lower than our everyday comps, providing some indication of the opportunity we have this year. Being in a better seasonal inventory position is already evident in our first quarter momentum, in addition, I'm very excited about our fall and Christmas merchandise, which adds to my confidence in our seasonal top-line opportunity this coming year. Third is the enhanced execution of our At Home 2.0 strategy to ensure we have the most effective go to market approach, industry leading prices and accessibility to our products through the most convenient channels for our customers. As Chad mentioned we now have a full year of learnings from over a dozen EDLP Plus campaigns in fiscal '21. These learnings are helping us refine our approach and building on our success, just as we did recently with our Bed, Bath & Storage event. We have exciting new reinventions, collaborations and price to announce in the coming months. For competitive reasons, we plan to discuss these closer to launch. We continue to enhance our omni-channel offering, which we launched only a year ago. We plan to test ship from store in the fall of this year and drop ship next year. With respect to unit growth, I'm excited we've recently resumed new store openings, reigniting our key growth engine. Year-to-date, we've already opened six net new stores. With increased visibility, we're now confident in opening 15 net new stores this year, the upper end of our previous target of 12 to 15. The additional stores will open in Q3, and total new store openings will be equally split between new and existing markets, reflecting our thoughtful and balanced approach. We have a robust real estate pipeline, with a clear line of sight for the next several years, and our opportunities are only getting stronger. As we've said before, next year in fiscal ‘23, we plan to resume 10% annual unit growth. As we reflect in the long-term, we are excited to be in a large and growing industry. We believe the tailwinds of strong home sales, nesting and de-urbanization are likely to continue to benefit our industry over the foreseeable future. However, as was evident last year, this rising tide is lifting all boats equally. At Home's differentiated model and effective execution has helped us emerge as a key winner in our category. We've always said that our unmatched breadth and depth of assortment at everyday low prices and our low cost operating model set us apart. In addition, our warehouse like stores, provide tremendous flexibility to pivot and adapt to Omni channel, which we believe is the most sustainable long-term model. We're still in the early innings of many exciting initiatives and remain focused on delivering strong and consistent results. We continue to see a long runway with potential for 600 plus stores over time, up from 225 stores today. Based on the current performance of some of our more mature markets, we think there is a potential for sales per store to average $10 million or more over the long run, especially with a robust Omni channel strategy that we can increase our customer reach. In other words, at 600 stores, we have the potential to be an Omni channel retailer with more than $6 billion in annual revenue. We have never been more confident in our customer value proposition, competitive positioning and our ability to capture this large opportunity ahead. I would like to close by thanking our team members and shareholders for your continued support of At Home. With that operator, please open up the line for question.

[Operator Instructions] Our first question comes the line of Simeon Gutman with Morgan Stanley. You may proceed with your question.

Hi, everyone, nice results in the start to the year. My first question maybe for Jeff, if freight costs weren't an incremental headwind, can you give us a sense where you would be guiding the margin? And are there any other puts or takes relative to going back to that 9%, meaning selling margin, you're just making a planning assumption that may be selling margins will also be under some pressure?

Yes, Simeon, as we said in our prepared remarks, we would have expected it to be well above those fiscal '19 margins of 9.5%. When you think about the puts and takes in the P&L, certainly freight is the largest one there, and there's really nothing other unusual going on outside of the incremental freight that's dragging us to be below normal this year in our outlook.

And a follow up to that, and I respect if you don't want to be that specific, but can you put maybe some guardrails around the freight in terms of 100 basis points, 50 basis points, anything more granular?

We won't be that specific. I would say, obviously, we point you back to the 9.5% in fiscal '19 and then 9% outlook this year, I would say, because we're expecting this year to be above average. By definition, it is greater than 50 basis points. But, at this time, we're not quantifying it, and the full impact of that headwind is embedded in the 9%.

Fair enough. And if I maybe can pivot on to sales, wondering if you have enough data on like customers and want to -- so when you can look at your spending, whether it's this year, a quarter ago, whether it's the same customer who was spending with you during the pandemic versus new ones, and then what items were they buying? As I'm sure you contemplated some of this as you put your plan together for this year.

Sure, Simeon, it's Lee. We've seen a lot of new customer growth. The industry grew about, obviously some significant increase in the industry overall. But overall, if you take all the home decor and home furnishings players, their growth combined was really from existing customers coming in and spending more often. We saw that as well. Our existing customers coming in and spending more with us, but we also saw significant new customer growth. We had a 40% increase in our Insider Perks membership. That would tell you that those are new customers. So, we're really pleased with that new customer growth and the existing customer coming in and coming in slightly more often and their basket sizes were bigger. So, we're really pleased with that performance overall. And going forward, obviously, how do we retain these customers, that's going to be a key focus of ours going forward. We've had -- our brand is super healthy right now, our new customers indicate strong satisfaction and high intent to repurchase. They rate us higher in KPIs like product quality and value, and our NPS score is up significantly. So, we feel like we've got momentum with those new customers, and a great deal of satisfaction with our existing customers from the performance we had last year as well as obviously the momentum we're seeing moving into the first quarter.

Great. Thank you. Good luck.

Thanks, Simeon.

Our next question comes from the line of John Heinbockel with Guggenheim. You may proceed with your question.

So let me start, either for Lee or Chad or both of you guys. When you think about assessing and trying to figure out demand for the back-half of the year, and I know you are going to flow inventory in three or four waves, but you think about the things people can spend money on in the back-half of the year like travel and so forth which they couldn't last year. What challenge does that present? How do you think about demand in the back half of this year, and how you want to plan for that?

For us, this past back half of the year was inventory constrained significantly, obviously with 90% full price selling and Christmas. I would tell you that there was a lot more business to be had, if we had the product. So, we've looked at what our out of stocks were, and when those dates were by store and have seen a lot of opportunities. So yes, people have more options to choose to spend their more money, but we left a lot of money on the table. So, we're really pleased with the tools that we put in place in the inventory planning and analytics standpoint, and that helps us look at the business. And as we've looked at our performance last fall, and we look in plan for this coming fall, we take those opportunities into our thought process. We also put in multiple flows, we can read lead the business throughout spring, and through the summer. So, if we need to clip orders, if there is, let's say less demand than we’ve originally planned, then we can we can adjust those upfront. So, we have less risk, we can also allocate it to where the business is, and with those later flows, we can allocate it to where the demand is. So, we feel like we've risk mitigated those situations. At the same time really leaned into the opportunity. There was a lot of money left on the backside of last year. And as you know, we buy in halves. So, patio is in spring and summer, and Halloween Harvest and Christmas is in the back-half. And in the first-half of the year, we got an easy compare from the 0.3 comp in the back-half. We've got more challenging compares but not when it comes to seasonal. There's a lot of opportunity there for us to buy.

Maybe as a follow-up to that. So seasonal in the fourth quarter, I know you had planned it to be up low-single digits. I don't think it was up double-digit, right. It was probably up 5 to 10, and do you think next year, could it be up substantially greater than that?

It was low doubles on the seasonal sides, which we were really pleased. And it was better full price selling. It wasn't like we could get any more product. So we're pleased, but there was just a lot of money left on the table. And so, we're buying behind those ideas. We learned a lot. We learned what the customer wants, especially with these new customers to what were they interested in buying. And so we've been able to plan our assortment accordingly and go after that opportunity.

Maybe just lastly, when you think about marketing and not so much marketing dollars, I think more outreach, email outreach to customers. How will this year be different than last year? You've acquired a lot of customers. Is the idea hit them on the each of the events and see if you can get some engagement on at least some of those events? Is that the primary focus?

Well, there's a number of things we're focused on in marketing. First is we're going to spend more money. We're targeting 3.5% of sales that will help continue the momentum forward. We've not spent that level in our history we wanted to, but oftentimes, sales has outpaced that. So we're going to be spending more money. Our creative is focused on acquiring new customers and keeping the Insider Perks members that we gained engaged. Our brand voice change, you may have noticed that in the back-half of the year, it's far more fun and playful, and it reflects our brand personality and a lot more what we say more Southwest Airlines, less American Airlines, it'll differentiate us we don't take ourselves very seriously. I mean, in our space, most people are very serious. They're sold in fancy stores and we commission sales folks. We're not; we're concrete floors, metal shelves, it's self-help model. So why take ourselves seriously. So the tone is different. We're going to spend the money against supporting EDLP Plus events. We've seen that that's drove traffic, which is we want in frequency, which is what we need. We were going to be able to talking about our new news around seasonal collaborations. With these collaborations, you have some cut through with that. The value proposition is continued to be enhanced. We've got our best price promise in the store hassle free returns, but prices are going to be larger. And we've actually changed the size of our hang tags on our product and our packaging to be bigger on the prices. So, we're loud and proud about our prices. Our direct mail campaign is going to be very targeted that the loyalty team, our CRM team, we now have a team. And we're focused on how do we get more out of each decile. And so that's going to be focused effort on our part, and more targeted and customized for the customer. And digital, always is more than half of our customers are coming to the website before they even come to the store. So digital is super important. So, maybe a long answer to a short question. But that's the comprehensive approach that we're taking to marketing, because we feel we can gain more customers still this year, and keep most of the customers that came in last year and have been spending more than last year.

Thank you, guys.

Thanks, John.

Our next question comes from the line of David Bellinger with Wolfe Research. You may proceed with your question.

Hey. Great, thanks for taking the questions here. So you mentioned the acceleration in January comps and that's continued on to Q1. So can you comment on this any impact from the adverse weather in Texas in the surrounding markets? And just how much of a headwind has that been quarter to date? And could sales have been even stronger than some of the expectations you've outlined for Q1?

Sure. Obviously, it was a tough time for our home state. Our sympathies are with those that were affected, there was a lot of people affected, broken pipes, and people have significant home damage. Many of our team members had that too. So we're very sensitive to that. Several stores that were closed or limited hours for a couple of days during the storm. But business rebounded as soon as the temperature warmed up business bounce back too, as soon as people got power back. So, our comp guidance includes the February weather impact. So, you can see that obviously, we had strong momentum in January, a slight step back just because of the storm. But that was the only step back we've seen. It's been really strong business for us, especially when we're talking about comps over 140 for the quarter.

Got it. And then just another one on the freight cost here. So how are you assessing that the trade-offs of incremental sales versus lower margin rates in light of these cost pressures? Is there some type of framework we can think about there? And is there even a scenario on the table where you could sacrifice sales growth in order to maintain higher margin rates?

Yes. I would say right now, David, I mean, we're working incredibly hard with our merchant team and Peter's team on the operation side to prioritize the freight, making sure that we have the right product coming in to support our sales, and even with the incremental freight costs, and what that costs us in terms of incremental margin. The right thing to do for the business, both near term and long term is to get that product on to the selling floor and sell that through. So, it's not to the extent right now where we would ever sacrifice sales in lieu of avoiding some near-term incremental freight charges.

Understood. Appreciate the help here. Thanks, guys.

Thanks, David.

[Operator Instructions] Our next question comes from the line of Karru Martinson. You may proceed with your questions.

Good afternoon. Just in terms of the store footprint, as you guys expand, what's the real estate opportunities out there for you all?

Yes, there's obviously we've been doing -- I've been doing this 8.5 years, I've always seen a nice pipeline. There's a lot of stores that are available. We're excited about what's possible with our brand. We can make a lot of different things work because of the capability of our real estate architecture and construction team and our store ops team. A store that just opened just last week in Oklahoma City was three different store fronts side by side, all the walls torn out between them and turned into an At Home store. And we're thrilled with that location already. That's an example. We can take a store that was maybe smaller size and can take some of the parking spots out from the side of it, and extend the length of the store. Or we can just drop into bigger stores and put in a false wall or wall to make it only the 85,000 square feet we need. So we can be very flexible. And the pandemic is creating winners and losers out there. We've been emerging stronger and better positioned in taking share, others are closing their door, we’re really the only national retailer interested in boxes this size. So people call us first. So, I would tell you, I feel great about our pipeline. I'm confident in our 600 plus store potential. There's so many markets where we are just starting, quite frankly, California has just a few stores, we can get to over 90 stores there. New York, Tri-State area, it's just getting started and we can do just so many there. So, I'm thrilled with what's there. I'm grateful for what our team can do. And I don't see a constraint in terms of boxes.

And when you look at the Omni channel capabilities of your store fleet, I think you mentioned 70% kind of handle BOPIS. What are the limitations that you see there with your existing fleet? And what do you look for in the new locations?

Say the question again, just to make sure I get it right.

I thought I heard that you guys said that you were handling BOPIS by online and the Omni channel at 70% of your locations. I just wanted to understand what's the limitation for going fully to all of your stores?

Oh, sure. Yes. Sorry. Thank you for clarifying that. We have buy online pickup in store and curbside pickup at all of our locations. We have delivery at 70% of our locations and that's just a constraint on our delivery partner. And they're working on adding more markets to support us. And that's next day local delivery and it's with PICKUP. That's the name of the company. And Postmates is also a partner of ours as well, through their tool. So, we're working on adding more markets. But in every single store you can do buy online, pickup in store and curbside pickup. And we look forward to testing ship from store in the back-half of this year to make us essentially available nationally to anybody.

Okay. Sorry. My apologies for mishearing that. And just lastly, it's an interesting dilemma in the sense that your inventory constrained, yet you kind of proved the inelasticity of your product with the 90% full price selling. I mean, does that change at all in terms of how you look at your pricing architecture going forward?

I wouldn't say it changes our pricing architecture. We're going to focus on being the lowest price out there. We need to win on price. And when we do that, we become more accessible to everyone and that's what we want to do. What I would tell you, you get the price right and get the product right, you can sell it at full price, and it's not a markdown. What we did learn with less inventory this year and we got better in terms of inventory positions throughout the year, we were down 30% in Q2, down 20% in Q3 and down roughly 13% in Q4. Obviously, we got in better inventory position. We can actually run this business with slightly less inventory. And that's what we've learned, is we can be better and smarter. That's what Chad talked about is rationalizing our SKU count, buying behind bigger ideas and making sure that we’ve got the appropriate depth by stores based on demand, using a lot of more these signs and the data analytics around being more efficient. That’s what we learned, we could do better and that’s what we’re taking those learnings to help us, continue to get the right product at the right store at the right time, to drive the right outcome for the consumer and the right profit for our company.

Our next question comes from the line of Jeremy Hamblin with Craig-Hallum. You may proceed with your question.

Thanks, and congrats on a great quarter and year. I want to piggyback on that last point about your inventory management and the adjustments that you've made, which sounds to me like your mark down risk is probably going to be a little lower going forward. So as we think about this year, possibly by the time we get to Q4, we may be in a more normal environment, less COVID impact, hopefully. As we think about that differential between 10% good sold at markdown prices versus 30% in a normal year, given this change in inventory management and planning and allocation, what's kind of in your target in terms of how you would think about and we can use Q4 as the example, how you think about the percentage of goods that would be marked down on a normalized basis going forward in something like Q4?

Sure, Jeremy. What I'll talk about first is inventory planning and just the progress we've made, and Jeff will cover a little bit of the margins on that. But what I would say on the planning side, At Home 2.0 one of the key pillars of our At Home 2.0 effort was inventory management. We doubled the number of planners and allocator, we wanted more analytics around it and more eyes on our decisions. We put new tools in place, and we created this and enhanced data analytics team, looking at sales curves, which then is provided to our buying team. And the buyers, I would tell you, we've upgraded the quality of our buying team as well. They're just fantastic at picking great product. And then our planning team is helping inform how much to buy. You put those things together, better quality products, on the mark priced right, and then bought appropriately, you're going to end up with less markdowns. You also have a process from an everyday standpoint now it's every other week we do an open to buy, so we can adapt quickly, our orders up and down based on what we're seeing. I will tell you as we think about our product assortments, we're doing an assortment planning, overall, to make sure that we have a full and collected assortment. When you make those decisions, and then you put it through an EDLP Plus program, which is when you're highlighting certain categories, and then you separate your full price from your markdown, your markdown sell-through has been better because of the separation, the full price looks fantastic. It's not all jammed together with some markdown product as well, so it's easy to shop in both cases. And as we look at our customer, there's bargain hunters and there's home decor enthusiasts as the way we're calling them to bargain hunters like to separated clearance, which is through EDLP Plus to our markdown management's better, we're selling more first mark. So, I would tell you, all of those things put in place is helping us have I would say less risk going forward to answer your question around markdowns. And I would tell you, it's better buying from a quality of the assortment and the strategy around it, and it's fantastic analytics around the amount you buy and where you send it. On the margin side, Jeff?

Jeremy, as Lee said, one of the biggest learnings coming out of COVID for us was that we could do more with less. I would also say, one of the other learnings is that we can task ourselves with looking to sell more at full price in our seasonal assortments, and historically, we'd love to sell 70% of the buy at full price. And moving forward, obviously, it's going to be very hard to replicate the 90% that we saw on the back-half of this year. But our merchant teams and Chad and his team are focused on delivering 80% in this coming year, and that should be the new normal for us moving forward.

Great. That's what I was looking for. And then just two quick follow-ups here. In terms of thinking about Q1, Q2, seasonal as a percent of sales in Q1 and then seasonal as a percent of sales in Q2 on a typical basis?

Yes, on a typical basis, you would normally see, Q1 would be right around 25%, and then Q2, it would be closer to low 30% in a normal year.

Do you expect that to be different this year more seasonal goods?

Right now, it could vary a little bit Jeremy, but I would say, it's shaping up right now and the mix that we're seeing is pretty consistent with what we would have expected based on history.

Okay, got it. Then the last one for me actually is just coming back to the SG&A expense here. You've indicated, you're going to do a little more marketing than you typically have. In terms of just thinking about your more normalized SG&A levels, and clearly, you're not going to have that in Q1, because you're running giant sales numbers. But in terms of thinking about where that that levels going to be, you've kind of had22% as the baseline. There's been some years that have varied from that. But generally speaking, '22 has been kind of the bogey as a percent of sales. Is that still, what you would think is the case? Is there a target that you guys have out there?

Maybe it's easier, Jeremy to talk about it in terms of dollars, than percent. And so if you look, at the back half of the year and whether it's the midpoint or the upper end of what we just talked about, for Q1 and that 450 to 470 range. We did $470 million in sales in Q3 this past year. And that was at, 20.7%, $97 million, obviously, there was elevated incentive compensation in those dollars, but there was also lower than normal advertising expense. And there was also lower than normal preopening expense, because we had paused our new store development programs. So, when you put all those moving pieces together, they pretty much net out in the wash, and those Q3 dollars or percent would probably be pretty close to typical when you look at our Q1 guide

For the sales level that you're looking for.

Yes, because the sales level at the midpoint is $10 million less than we actually did in Q3. I think we did $470 million in Q3 last year. So it's pretty apples to apples.

Okay. But let's just say if the Q2 sales level was a little bit lower than Q1, then you would expect your SG&A a little bit lower as well.

The dollars would be right, because the -- yes, obviously store labor, the receipts would be a little lower and marketing expenses and those other things would come down commensurately.

Great. Super helpful. Congrats, guys. Thanks. Good luck.

Thanks, Jeremy.

Our next question comes from the line of Curtis Nagle with Bank of America. You may proceed with your question.

Good evening, guys. Thanks very much. So, it might be tough to segment out. But just curious, Lee, if you could talk a little bit out, 1Q so far at least, looks like a pretty lights out quarter. What's driving the acceleration over obviously 2020 and 2019 by a pretty good degree? And how much of that is new customers that re-up on inventory, the reinventions? And what do you think is the most incremental factor?

Sure. What I would say first and foremost, Curtis, the momentum continues to gain strength since Q4. And now, we're no longer inventory constrained, like we were in Q4 on the seasonal side. So the efforts around At Home 2.0 EDLP Plus campaigns are working strong. We have inventory positions which has improved, I'm pleased with that. And I would say we're growing two to three times faster than the industry, from what our data is. So we're gaining clear share. And all of our departments are performing well, which we're really pleased with both the spring products, so patio and garden is performing extremely well, and as well as the everyday product. Stimulus is helping, but as you know we may have mentioned before, we found that the stimulus is only like a four week benefit. And it's like icing on the cake. It's not the cake. It's a nice little upside for us. But that is not what's driving these numbers. What's driving these numbers is our momentum and our performance. And I'm really pleased. And I would also tell you some of the other things that are helping is just the macro trends, housing, nesting, de-urbanization, clearly is in our favor, as which kind of works into the industry numbers, competitors closing from last year as helps. But I would tell you, we expect these trends to remain strong throughout the quarter. And it's really the work that we're doing that's making this happen, versus what the industry or the stimulus is doing.

Got it. And forgive me if you have already spoke to this, but just any commentary in terms of how to think about free cash flow, capital allocation. I think for to put up three stores what's the plan for the remainder of the year? I think it's what that's 6% growth, if I'm not mistaken.

Yes, 15 net new stores is what our target as of today's call. We have said 12 to 15 previously, and we're really happy that the pipeline and reopening everything is going to allow us to get to 15 this year.

And CapEx for the year, any comments on that?

CapEx for the year, probably the easiest way to think about it is, go back to fiscal '20, we opened about two times the stores and had growth CapEx of right around $250 million. So, that vast, vast majority of our CapEx relates to our new store development program. So, with half the stores opening, we would expect roughly half the CapEx this year.

Okay. Thanks very much and good luck to the rest of year.

Thanks, Curtis.

Our next question comes from the line of Zack Fadem with Wells Fargo. You may proceed with your question.

Hey, guys. So this is a business that has historically you've opened stores at very high productivity, and then this would translate to a low single digit comp level. But as we look at the state of the business today and all that's changed, I'm curious how you think about these dynamics? And whether you still think the high productivity low comp algorithm is still the right way to think about this company over the long-term?

Yes, what I would say is I'm really pleased with the productivity of our existing stores. We saw great performance across all vintages this year. Our average store sales now is about $8 million, it used to be $7 million. So when I mentioned that our potential is to have $10 million stores on average, we already do that. We have stores that do almost twice the company average in some markets that do well over 10. So, there’s potential to make these stores continue to be more productive and continue to drive same-store sales out of our store base. And they just mature well, I mean, honestly, there are older stores about the company average, as well as our newer stores did very well. I [indiscernible] that we've said is over the longer-term, we still see this as a low single digit business. But in the near-term, obviously, you can see when all things work the way we want them to work, it's been much stronger. And so we're obviously doing the things we feel like we need to, to drive outsized performance. And we also feel like there's some macro factors that help us as well that make that long-term algorithm much more attainable, and we can blow past it. But for the long-term, we still feel comfortable with that. That's the model.

Got you. And as I look at your SG&A on a per store basis, it was up only about 8% this year, obviously it was constrained in the first-half by furloughs. You lowered your marketing spend. But as we look at the normalization of that line this year, how should we think about per store SG&A growth?

Zack, I would say, really, SG&A is one of those things that over longer periods of time needs to be measured, and there was just a lot of funny things that went on. As you mentioned, in the first-half of the year with us cutting discretionary expenses, the lack of preopening and pulling back on marketing the furloughed and tiered salary reductions. I would say when you think about the back half of the year, and we've talked about the incentive compensation dynamics, but normalizing for the $5-ish million per quarter and above average incentive compensation, that would be more indicative of a per store SG&A run rate, than looking at the full year numbers, just given the funny dynamics between the front and back-half.

Got it. So, that's kind of call it a high 20s rate when you adjust for these items?

High 20s on a per store basis, I mean, in total, we were running in, recall the 21% range of adjusted SG&A the total sales, that was slightly below our historical average. But then, to take those dollars and put it on a per store basis, I have to do that math to see if that checks out.

Got you. That makes sense. Appreciate the time, guys.

All right. Thanks, Zack.

[Operator Instructions] Our next question comes on Jonathan Matuszewski with Jefferies. You may proceed with your question.

Hey, guys, congrats on the quarter and early 1Q trends. Thanks for taking my question. First one was just curious if you've looked at trends in markets that have reopened more than others, or those markets with maybe higher vaccination rates. There are some players in the industry suggesting that the category is actually outperforming in markets with populations that are spending less time in their homes, as the local economies have reopened. So, I know you mentioned geography strength is broad, but any color there would be interesting?

What I would say, Jonathan is this performance for us has been broad based, it really as you know, across the country. And yes, we've got a nice presence in states like Texas, that were have been more open, an emerging presence in Florida. But we were performing just as well in those states as we are as an upper Midwest and the Northeast, which may have be considered more slightly tighter in their restrictions. The nice thing is it's been very, very broad. And it's more about how long is this markets been open. And the more mature the market is, the stronger the market is for us in terms of sales per store, in terms of absolute dollars. And that for us is that gives us the greatest amount of confidence in this business. These stores mature nicely, markets mature nicely; our brand awareness continues to grow. And as we grow our brand awareness in a market, the business responds and the sales per store responds. And that's what I'm most excited about. So yes, we look at it that way. But it's really broad based across the country.

Got you. That's helpful. And then just a question on inventory. You mentioned paying up higher freight costs to get the product across the ocean and in the stores. Just any color in terms of, how your competitors are approaching this issue? They're not seeing the growth that you guys are, but how do you expect most of your peers to react here? Do you expect them to kind of also pay up at similar rates? Or would you expect some to be kind of left leaner on inventory? Hard to generalize, but any color in terms of maybe what you're hearing from your vendor partners would be helpful? Thanks.

Yes, Jonathan, this is Peter. I'd say the global situation is not unique to us in any way, and neither is the fact that rates have increased at a much faster pace than expected. But in addition to that, our sales have been very, very strong, causing our volume to be much higher than expected and outside of our contracted volumes. With the current situation, we've been extremely proactive and focused on supporting our strong demand with product flow. And generally, we're replenishing our inventory much faster than the rate of sales each week. In fact, from data provided by our transportation partners, we believe our backlog is well below the industry average right now. So does this get better? Yes, it does. As our volume adjusting contracts go into place May 1. Also we're the 35th largest importer in terms of cube, which we think gives us an advantage right now, and certainly a bigger advantage as we go forward into these negotiations. And so, I'd say just as a reminder, too, that the freight cost is recognized with the turn of the inventory for us as well. But, we expect things to normalize as we go into the back-half and our contracts take place.

And Jonathan that 35th is 35th largest importer across the entire economy, not just in our sector. And we've found Peter's team and our partners in this are doing a fantastic job. And what I would say is people back winners, and they prioritize and support winners. And that's how we've been able to get our backlog lower than others is because they see the momentum in our business and they want to support winners, because they know the volume is going to continue to grow for us. And so they want to support people that are going to help build their business.

That's helpful. Thanks, guys. Best of luck for the quarter.

All right. Thanks, Jonathan.

Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn this call back over to Mr. Lee Bird for closing remarks.

All right. Thanks, Laura. Thank you all again for joining us this afternoon. We look forward to talking to you in the coming days and weeks. Take care and be safe.

Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time.