The Container Store Falls Short In Q4, Fiscal Year

For the fiscal year ended February 28, The Container Store posted net income of $22.7 million, or 47 cents per diluted share, versus a net loss of $51.6 million, or $2.87 per diluted share, in fiscal 2013. Adjusted net income was $16.5 million, or 34 cents per diluted share, versus $16.4 million, or 33 cents per diluted share, in fiscal 2013.

A Zacks Investment Research analyst average estimate called for 31 cents per diluted share, in the fourth quarter.

Comparable store sales were down 1.4% versus the fiscal year earlier, the company reported, while net sales were $781.9 million, up from $748.5 million in fiscal 2013.

For the fiscal fourth quarter, net income was $13 million, or 27 cents per diluted share, versus $18.3 million, or 38 cents per diluted share, in the year-prior period. Adjusted net income was $11.8 million, or 24 cents per diluted share, versus $10.7 million, or 22 cents per diluted share for the year-earlier period.

Comps slipped 0.8% versus the quarter a year ago, Container Store noted, while net sales were $224.3 million, up from $216.8 million in the 2013 quarter.

“Our fourth quarter did not conclude according to early-in-the-quarter trends,” Kip Tindell, Container Store chairman and CEO, said in announcing the financial results. “Weather was a contributing factor, as we experienced winter storms in February during the vitally important last four days of our 50-day annual elfa sale and during the last week of our 19-day sale’s extension. Historically, approximately 20% of our elfa sale sales occur during those last four days and approximately 60% of the sale extension sales occur in the final week. Additionally, a stronger U.S. dollar had a significant impact on the conversion of our Elfa subsidiary sales. Weather and foreign exchange headwinds aside, our sales performance fell short of our expectations in fourth quarter and in fiscal 2014. We can and will do better.”

Tindell continued by saying that Container Store executives and staffers “are focused on strengthening our business as we build for the future in order to create long-term value for all of our stakeholders. We remain very confident of, and excited about, the potential of our three major strategic initiatives— TCS Closets, Contained Home and POP!— with fiscal 2015 serving as an investment year for these programs in order to bolster their longer-term success. We’re also working on shorter-term opportunities to drive the core business, innovate and differentiate.”

In addition to its three major strategic initiatives, the company stated that it would focus on shorter-term initiatives, which include communicating more frequently and effectively with its best customers and enhancing solutions-based selling through training and technology. In addition, Container Store asserted that it is upgrading the customer shopping experience through programs such as free shipping on orders over $75 and new delivery options, as well as elevated mobile features for its Click & Pick Up service and improvements to its online elfa Custom Design Center. The company maintained that it also is launching a customer financing program.