The Container Store delivered a solid second quarter ended September 28, 2019, as the storage and organization retailer continued to grow its Custom Closets business.
Consolidated net sales were $236.4 million, up 5.3% as compared to the second quarter of fiscal 2018. Net sales at TCS were $221.2 million, up 5.9%, driven by an increase in comparable store sales of 5.4%, combined with incremental sales from new stores. Elfa third-party net sales were $15.2 million, down 2.6% compared to the second quarter of fiscal 2018 due to the negative impact of foreign currency translation during the quarter.
Comparable store sales increased 5.4%, with Custom Closets up 9.3%, contributing 420 basis points of the increase in comparable store sales, and all other product categories up 2.2% contributing the remaining 120 basis points.
Net income was $3.6 million, or $0.08 per share, in the second quarter of fiscal 2019 compared to net income of $3.2 million, or $0.07 per share in the second quarter of fiscal 2018.
Melissa Reiff, CEO, The Container Store, said, “It was a solid second quarter during which we continued to make good progress against all of our key strategic priorities. The work we have been doing across stores, merchandising, marketing, technology and infrastructure is having a positive impact and driving our financial performance. The newness across our Custom Closets and other product categories is resonating with our customers, as is our refreshed marketing and merchandising, and we have multiple store tests that are generating encouraging early results that we intend to incorporate into our go-forward store growth plans. Additionally, our new distribution center is proceeding on plan and on budget, and we have successfully received initial inventory to stock the facility, as well as commenced outbound shipments to stores and customers. All of this work positions us well to capitalize on the many opportunities that lie ahead, including an estimated $6 billion total addressable market for Custom Closets and substantial whitespace for store growth beyond our current base of 93 stores.”