The Container Store’s stock was down more than 20% on Tuesday as the company missed key sales targets for the second quarter.
According to the home storage specialty retailer, net sales for the quarter ended August 30 were $193.2 million, up 5.2% as compared to the second quarter of fiscal 2013. Company comparable store sales for the second quarter were down 0.4%.
Published reports indicated that analysts had expected quarterly sales of $199.2 million.
Company officials said the increase in quarterly sales stemmed largely from sales at new stores.
“We are very excited about our new store growth, with three more openings ahead of us this year,” said Kip Tindell, chairman and CEO. “Our targeted annual 12% minimum square footage growth is among the fastest growth rates in the retail industry.”
The Container Store has opened five new stores this fiscal year (including one store relocation), with three more planned to achieve its targeted 12% minimum square footage growth in fiscal 2014: Salt Lake City area in Murray, UT (Fashion Place Mall, opening October 18); Chicago, (South Loop — in the Roosevelt Collection, opening November 15th); and the Phoenix area in Glendale, AZ, (Arrowhead Towne Center, opening February 7, 2015).
For the 26-week period ended August 30, net sales were $366.7 million, up 6.8% as compared to year-to-date fiscal 2013. Net sales in The Container Store retail business were $324.5 million, up 7.2% as compared to year-to-date fiscal 2013.
Company officials said the increase in net sales was driven by new store sales and the extension of its annual elfa sale in the fourth quarter of fiscal 2013.