The Container Store delivered a solid second quarter of its fiscal year, with both sales and earnings up as the retailer continued to step up its omnichannel growth and marketing efforts.
In the second quarter ended September 29, consolidated net sales were $224.5 million, up 2.8% as compared to the second quarter of fiscal 2017. Net sales at the retailer were $208.9 million, up 3.3%, with the increase driven by incremental sales from new stores, as well as a comparable store sales increase of 1.3%. Elfa third-party net sales were $15.6 million, down 3.1% compared to the previous second quarter.
Net income was $3.2 million, or $0.07 per share, in the second quarter of fiscal 2018 compared to a net loss of $0.9 million, or $0.02 per share in the second quarter of fiscal 2017. Adjusted net income was $4.7 million, or $0.10 per share, in the second quarter of fiscal 2018 compared to adjusted net income of $5.5 million, or $0.12 per share in the second quarter of fiscal 2017.
“We continued to make progress against our key strategic initiatives in the second quarter and also completed a debt refinancing that extends the maturity of our credit facility while generating approximately $0.07 per share in annualized interest savings,” said Melissa Reiff, CEO, The Container Store. “‘To Own Custom Closets’ is our number one strategic priority and we saw continued momentum in our custom closets sales in the quarter, along with strong omnichannel growth and effective digital marketing campaigns. However, elements of our merchandise campaign test and learn efforts, mostly around our other product categories, did not resonate with customers as well as we expected, curtailing our comparable store sales and earnings performance for the quarter.”
Reiff added, “Once we cycled the merchandise campaign changes, we were pleased to see our other product categories return to positive comparable store sales territory and based on our year-to-date financial and operational performance, we are reiterating our full year outlook.”