The Container Store fell short of Wall Street first-quarter estimates, especially in its general merchandise business, as the retailer recorded double-digit negative comparable sales.
Consolidated net loss was $14.7 million, or 30 cents per diluted share, versus a net loss of $11.8 million, or 24 cents per diluted share, in the first quarter a year past. Adjusted for one-time events, net loss was $12.7 million, or 26 cents per diluted share, versus a net loss of $10.1 million, or 21 cents per diluted share, in the year-previous period.
Container Store missed a Zacks Investment Research analyst consensus estimate of 18 cents per adjusted diluted share in earnings. Revenues missed a consensus by 4.29%.
Comparable sales slid 13.7% year over year, with general merchandise comps down 21.8% and Custom Spaces+ comps up 1.9%.
Consolidated net sales were $181.9 million versus $207.1 million in the year-earlier quarter. Loss from operations was $13.8 million versus $10.5 million in the year-prior period.
Net sales in the Container Store retail business came in at $171.5 million, down 12.1% year over year, while in the Elfa International operation, net sales were $10.3 million, down 13.7%. With foreign currency volatility excluded, Elfa net sales slipped 12.4%.
In announcing the financial results, Satish Malhotra, Container Store president and CEO, “Our first quarter sales results continued to be impacted by ongoing macro-related headwinds though we were encouraged by sequential monthly improvement over last year in general merchandise and Custom Spaces. The sequential improvement in Custom Spaces resulted in positive comparable sales growth for the quarter. We attribute this change in sales trajectory to the strength of our Garage+ and Decor+ by Elfa launches, and our premium wood-based line Preston, which had the best sales order quarter in its history. Additionally, we were excited by the positive customer response to our recent new and relocated stores and look forward to the two remaining new stores we have planned for this fiscal year. While we cannot control the current macro environment, we are pleased with the progress we are making on our initiatives and continue to believe in the opportunities ahead as more and more customers realize the power of organization.”
