The Container Store came up short of a Wall Street earnings estimate as comparable store sales in its fiscal fourth quarter fell.
Net loss in the quarter was $189.3 million, or $3.85 per diluted share, versus net income of $23.2 million, or 46 cents per diluted share, in the year-earlier period.
Adjusted for one-time events, net income was $8.8 million, or 18 cents per diluted share, versus $23.2 million, or 46 cents per diluted share, in the year-past quarter, the company stated.
A Zacks Market Research analyst consensus estimate called for earnings per diluted share of 23 cents.
Comparable store sales at The Container Store slipped 13.1% during the quarter, with Custom Spaces Plus down 11.4%, contributing a 440 basis points decrease to comps versus the year-prior quarter. General merchandise comps were down 14.2% versus the year-past period, negatively impacting comps by 870 basis points, Container Store reported.
Net sales during the quarter were $259.7 million versus $305.5 million in the year-before period.
The Container Store retail business sales were $245.5 million, down 14.3% in the quarter year over year, while Elfa International AB’s third-party net sales were $14.2 million, down 25.3%. With the impact of foreign currency translation excluded, Elfa’s third-party net sales were down 17% in the period year over year.
For the full fiscal year, The Container Store’s net loss was $158.9 million, or $3.21 per diluted share, versus net income of $81.7 million, or $1.62 per diluted share, in the year earlier. Adjusted net income was $37.2 million, or 75 cents per diluted share, versus $82.9 million, or $1.65 per diluted share, in the year past, the company reported.
Net sales were $1.05 billion versus $1.09 billion in the year before, with comps down 3.7%.
Satish Malhotra, The Container Store president and CEO, said, “Excluding the impact of goodwill impairment, we ended the year with a fourth-quarter performance in line with our expectations, especially in light of the continued macro-related headwinds that have negatively impacted customer traffic trends. Despite the backdrop, we maintained our focus on positioning The Container Store for long-term profitable growth and market share gains. We successfully launched five noteworthy, large-scale programs that are expected to support future growth, including launching The Container Store Custom Spaces branding and Preston product offering, introducing new product categories to give customers a compelling reason to shop, significantly improving our e-commerce experience, relaunching our Organized Insider loyalty program, and opening new small format stores in key markets.”
As to the future, Malhorta added: “We are taking a cautious approach given the ongoing macro uncertainty and pressure on our business in the first fiscal quarter-to-date. We plan to execute cost management actions across the organization while remaining committed to our investments in our long-term strategic initiatives. We plan to continue prudently investing in growth areas of the business, including Custom Spaces, e-commerce and product newness that is complementary to our current merchandise assortment while remaining committed to new store growth.”
