The Container Store posted year-over-year sales and earnings declines for its third quarter, although it noted new product success during the period.
Consolidated net loss was $6.4 million, or 13 cents per share, versus net income of $4.2 million, or eight cents per share, in the year-before quarter. Adjusted for one-time events net loss was $4.1 million, or eight cents per share, versus net income of $4.1 million, or eight cents per share, in the year-past period, The Container Store reported.
According to Yahoo Finance, adjusted loss per share in the quarter missed an analyst estimate, which came in as a loss of five cents per share.
Comparable sales slid 16.8% in the quarter year over year, with general merchandise categories down 20.4%. Comps in the Custom Spaces+ business declined 9.2% from the year-earlier period, the company stated.
Net sales were $214.9 million in the quarter, down 14.8% from the year-prior period, with sales in The Container Store retail business down 15.4% to $202.5 million and those in the Elfa International business down 4.2% to $12.4 million. With the impact of foreign currency translation excluded, Elfa third-party net sales were down 4.9%.
Satish Malhotra, The Container Store president and CEO, said in a conference call the quarter had some bright spots. Despite the declines in the core general merchandise operation, he noted The Container Store experienced positive reception to new product introductions, with sales more than double company expectations. In particular, new premium products continued to do well, he said, adding that customers purchasing those products have a higher average ticket compared with customers who don’t. Discovery categories also performed well with on-the-go travel solutions and home fragrances achieving double-digit growth and comps in the quarter year over year, he added.
In announcing the financial results, Malhotra said, “As we discussed in our commentary ahead of the ICR Conference last month, our third-quarter sales reflected similar trends to what we experienced in the second quarter as our general merchandise categories weighed on results while our Custom Spaces assortment relatively outperformed. In fact, Custom Spaces saw sequential improvement in comparable store sales declines from the second quarter driven by improved performance in our elfa product line and strength in our premium, wood-based line, Preston. Despite the sales shortfall from our original guidance, promotional discipline and tight cost management enabled us to deliver bottom line results within our original outlook range.”
