The Container Store’s first quarter saw the storage and organization oriented retailer post a narrower net loss and a rise in sales.
In the first fiscal quarter ended July 2, The Container Store Group recorded a consolidated net loss of $2.1 million or four cents per diluted share, compared to $5.8 million, or 12 cents per diluted share, in the 2015 period.
Comparable store sales for the first quarter were down 1.4% year over year, Container Store noted. Consolidated net sales were up 4.4% to $177.4 million, with net sales in its retail business up 5.1% to $161.2 million and Elfa International AB third-party net sales down 1.8% to $16.2 million, versus the 2015 period.
In the first quarter, Container Store noted that it changed its method of comparable store sales reporting. Without the change, comps would have declined 0.2% based on the prior reporting method, the company said. The Container Store explained that it changed the comp sale calculation to reflect the point at which merchandise and service orders are fulfilled and delivered to customers, excluding shipping and delivery. Previously, it measured comps in a given period based on merchandise and service orders placed in that period, excluding shipping and delivery, which did not always reflect when the merchandise and services were received by the customer and, therefore, recognized in the company’s financial statements as net sales. Container Store asserted that changing the comp operating metric to better align with net sales presented in its financial statements would help investors better evaluate the company’s financial performance.
Melissa Reiff, Container Store CEO, said, “In our first fiscal quarter of 2016, we saw a benefit from the strategic investments and ‘closet domination’ focused initiatives we implemented in fiscal year 2015. TCS Closets was again a key driver of comparable store sales performance providing a 230 basis point lift. And, we improved our operating profitability, as we maintained strong gross margins and delivered SG&A efficiencies. Looking ahead to the rest of the year, we remain committed to maximizing the targeted results of our fiscal year 2016 SG&A savings program. While we are encouraged by the progress being made and resulting improvement in our bottom line performance, we still have work to do on the top line. My primary focus in my new role, in collaboration with our leadership team, is to drive consistent sales and profit growth, all with our continued commitment to The Container Store’s principled way of doing business.”
The Container Store currently operates 80 stores.
