The Container Store revealed its preliminary sales results for the third quarter, with the company’s Custom Closets business driving a solid sales performance but holiday department sales declining.
In the third quarter ended December 28, 2019, the company’s consolidated net sales are estimated to be $228.7 million, representing an increase of 3.2% from $221.6 million in the third quarter of fiscal 2018.
Comparable store sales are estimated to increase 3% with Custom Closets sales expected to be up 10.2%, contributing approximately 420 basis points of the increase in comparable store sales. Other product categories are expected to decline 2%, negatively contributing to comparable store sales by approximately 120 basis points. This expected decline was more than entirely driven by a decrease in holiday departments’ sales, which are expected to decline 12.2% and negatively contribute 200 basis points.
The company continues to expect third quarter fiscal 2019 net income per share to be down as compared to the same quarter last year driven by previously discussed investments related to opening a second distribution center and incremental Custom Closets marketing investments.
Melissa Reiff, CEO, The Container Store, said, “We are pleased with our preliminary third quarter results and expect to deliver comparable store sales in line with our expectations. Our performance continues to be led by our highly differentiated Custom Closets business which is a key priority for us as we focus on expanding our share of the estimated $6 billion addressable market. As expected, performance in our holiday departments was a detractor, but our efforts to focus more on Custom Closets and our everyday product offerings more than offset the holiday departments’ sales decline.”
The preliminary financial results provided are based on the company’s current estimate of its results for the third quarter of fiscal 2019, and remain subject to change, the company noted. The company plans to report its full third quarter fiscal 2019 financial results after market close on Tuesday, February 4, 2020.