Container Store second-quarter sales, comps and earnings were down year over year, but the company still beat Wall Street estimates.
Consolidated net loss was $23.7 million, or 48 cents per diluted share, versus net income of $15.7 million, or 31 cents per diluted share in the year-previous quarter. Adjusted for one-time events, net income was $365,000 or one cent per diluted share, versus $13.8 million, or 27 cents per diluted share, in the year-past period, the company stated.
A Yahoo Finance-published analyst consensus estimate was for a loss of five cents per adjusted diluted share and revenues of $209.4 million.
Overall comparable store sales decreased 20% year over year, with general merchandise categories down 20.4%, contributing a decrease of 1,320 basis points to comps as Custom Spaces+ slid 19.3%, negatively impacting comps by 680 basis points, Container Store noted.
Consolidated net sales were $219.7 million, down 19.4% versus the year-before period, including a 10 basis-point negative impact of foreign currency translation. Net sales in The Container Store retail business slipped to $208.5 million, down 19.8%, the company pointed out. Elfa International AB’s third-party net sales were down 12.5% to $11.2 million and down 10.7%, excluding the impact of foreign currency translation.
Operating loss from operations was $17.8 million versus operating income from operations of $25 million.
Satish Malhotra, Container Store president and CEO, said, “For the second quarter, we delivered results above the high end of our expectations against the continued challenging macro-environment. We continued to give new and existing customers reasons to shop with us through our successful back-to-college campaign and hundreds of new, premium products supported by our Uncontained branding campaign. While sales remain pressured, we are incredibly pleased with the performance of these initiatives, which complement our core offering of storage and organization solutions. Similar to what we saw in the first quarter, new products and premium Custom Spaces performed significantly better than our core and value-oriented general merchandise assortment, underscoring the importance of our ongoing focus on growing our premium offering. In addition, we successfully incorporated key learnings from promotional tests earlier this year that encourage customer engagement while balancing a disciplined promotional cadence. Our store specialists continued to deliver an exceptional customer experience despite these turbulent times, which was demonstrated by a record-high store net promoter score of 81 for the second quarter.”
Malhotra added Container Store is updating its outlook “to reflect current product mix dynamics and lower than previously assumed SG&A savings as we thoughtfully and intentionally reinstitute pay increases for eligible employees. We continue to be disciplined in balancing cost management and capital allocation with investments in areas that resonate most with customers. This includes a continued focus on new premium products, innovation and Custom Spaces, all of which we believe will position us well when customers begin prioritizing investments in their homes.”
