The coronavirus pandemic and associated temporary store shutdowns impacted The Container Store’s first quarter, as the storage and organization retailer reported a sales decline. The company also named a new chief financial officer.
Consolidated net sales in the first quarter ended June 27 were $151.7 million, down 27.6% compared to the first quarter of fiscal 2019, due primarily to the impact of COVID-19 on store operations. Container Store net sales were $139.4 million, down approximately 28.5% with Custom Closets declining 22.7% and other product categories declining 33.5%. Online sales increased 192.3%, compared to the first quarter of fiscal 2019.
Net loss was $16.7 million, or $0.34 per share, in the first quarter of fiscal 2020 compared to a net loss of $4.1 million, or $0.08 per share in the first quarter of fiscal 2019.
Melissa Reiff, chairwoman and CEO, Container Store, said, “Our first quarter results were significantly impacted by the COVID-19 pandemic. We moved swiftly to protect the health and safety of our employees and customers by temporarily closing stores and shifting select locations to operate with curbside pickup. I am very proud of the dedication and commitment our teams exhibited during this time, and particularly pleased with the resiliency of our operating model as we were able to maintain over 72% of our consolidated net sales from the prior year period with our strong online channel growth that nearly tripled over the prior year in the first quarter. Deleverage on the sales decline, combined with a higher mix of online sales with certain temporary incremental costs to fulfill these sales, were meaningful profitability headwinds. However, we moved quickly to reduce expenses and preserve capital to help mitigate the bottom line and free cash flow impact, enabling us to deliver positive adjusted EBITDA for the quarter.”
Reiff continued, “As of today all of our stores are now reopened and operating at close to normalized schedules, with limited capacity. Retail sales trends have improved and we preserved approximately 90% of prior year sales for the fiscal month of July when looking at our sales orders taken. While we expect sales and margin performance to improve as fiscal 2020 progresses, we remain disciplined and agile as we manage the business in this still uncertain environment.”
In addition, the company said that Jeff Miller, vp/chief accounting officer, will succeed Jodi Taylor as chief financial officer, effective August 31, 2020. Taylor will continue to serve as chief administrative officer and secretary. Miller has been with The Container Store since 2013 and has served as its chief accounting officer since that time. He brings over 25 years of accounting and financial reporting experience to the chief financial officer role.