The Container Store missed Wall Street expectations in its second-quarter recent agreement by Beyond, Inc. to take a significant ownership stake in the organization specialty retailer.
Consolidated net loss by The Container Store in its second quarter was $16.1 million, or $4.85 per diluted share, versus $23.7 million, or $7.17 per diluted share, in the year-earlier quarter. Adjusted for one-time events, net loss was $10.7 million, or $3.23 per diluted share, versus adjusted net income of $400,000, or 11 cents per diluted share, in the year-prior period.
An analyst estimate posted by Yahoo Finance called for an adjusted diluted share loss of five cents and sales of $196.6 million.
Comparable sales decreased 12.5% in the quarter year over year, with general merchandise categories sliding 18.7%, contributing a decrease of 1,200 basis points to comps, Container Store reported. Custom Spaces Plus comps slipped 1.5%, negatively impacting comparable store sales by 50 basis points. Online sales declined 13.7% from the year-past period.
Consolidated net sales were $196.6 million, down 10.5%, versus the year-before quarter, the company noted. Net sales in The Container Store retail business were $186.8 million, down 10.4% in the quarter year over year, while Elfa International AB third-party net sales were $9.8 million, down 12.9%. With the impact of foreign currency translation excluded, Elfa third-party net sales fell 16.2% from the year-previous quarter.
The Container Store also announced that it has expanded its Custom Spaces offerings with a premium-wood closet-in-a-box system designed for easy do-it-yourself installation. The new, premium-wood options include nine different possibilities for a two-foot up to a six-foot closet.
Beyond, as part of the deal with The Container Store , has agreed to invest $40 million in The Container Store through a preferred equity transaction subject to terms and conditions that include an amendment or refinancing of The Container Store’s credit facilities as acceptable to Beyond.
In announcing the financial results, Satish Malhotra, The Container Store president and CEO, said, “Our second quarter sales results reflect continued sequential improvement compared to the prior quarter results. Custom Spaces continued to relatively outperform and, from a customer demand perspective, orders placed, but not yet delivered to customers experienced year over year growth during the second quarter of fiscal 2024. In addition, general merchandise has continued to sequentially improve as we remain focused on ensuring we are in-stock in core product categories, while also enhancing key areas of the assortment with newness and innovation. While the environment has remained challenging and promotions have intensified, we are pleased to see traffic trends improve from earlier in the year and look forward to continuing on the trajectory we are building. Additionally, we are excited to realize the longer-term opportunities that we believe will come from our recently announced partnership with Beyond, Inc.”
