Soft holiday sales resulted in a comp decline for The Container Store in its third quarter.
For the third quarter ended December 31, The Container Store Group posted net income of $5.1 million, or 11 cents per diluted share, versus $3.9 million, or eight cents per diluted share, in the year-earlier period.
Comparable store sales slipped 3.9% versus the 2016 quarter, with holiday department sales contributing notably to the decline. TCS Closets positively contributed 1.3% to third quarter comps.
Consolidated net sales in the quarter were $216.4 million versus the year-previous period, up 1.7%, with revenues in The Container Store retail business up 2.3% to $199.1 million. Elfa International AB third-party net sales were $17.3 million, down 5.2% year over year, with the negative impact of foreign currency translation reducing net revenue in the operation by 5.8 percentage points.
Melissa Reiff, Container Store CEO, said, “We’re pleased that our ongoing discipline on the expense side enabled us to deliver a 38% increase in earnings per share versus the prior year period. Our custom closets business, specifically elfa and TCS Closets, drove incremental sales and profit. However, holiday department sales were disappointing during the quarter, and, as we expected, our annual elfa sale was impacted by fewer selling days combined with Christmas and New Year’s Eve holidays falling on weekends.”
Reiff added that Container Store is approaching, “completion of our new long-term strategic plan that outlines our goals and priorities and our roadmap to achieving them. We look forward to sharing its central elements by June. Fundamental to this plan is leveraging our key differentiators and implementing new strategies to achieve top-line sales growth and maximizing the productivity of our stores by aligning our marketing, merchandising, in-store and online experience with the evolving expectations of today’s consumer.”
The Container Store opened four new stores in the third quarter, ending the period with 86 stores.
