Drop In Comp Sales Dampen The Container Store Q3 Revenue
A decline in general merchandise sales along with softness in comparable store sales were key factors in the decline of third quarter revenue at The Container Store.
For the quarter ended December 30, consolidated net sales were $214.9 million, down 14.8%, compared to the third quarter of fiscal 2022. Net sales in The Container Store retail business (TCS) were $202.5 million, down 15.4% compared to the third quarter of fiscal 2022. Elfa International AB (Elfa) third-party net sales were $12.4 million, down 4.2% compared to the third quarter of fiscal 2022.
Consolidated net loss and net loss per share were $6.4 million and $0.13 per share, compared to net income of $4.2 million and $0.08 per diluted share, respectively, in the third quarter of fiscal 2022. Adjusted net loss per share was $0.08 compared to adjusted net income per diluted share of $0.08 in the third quarter of fiscal 2022.
Comparable store sales decreased 16.8%, with general merchandise categories down 20.4%. Custom Spaces+ were down 9.2%, negatively impacting comparable store sales.
“Our third quarter sales reflected similar trends to what we experienced in the second quarter as our general merchandise categories weighed on results while our Custom Spaces assortment relatively outperformed,” said Satish Malhotra, chief executive officer and president of The Container Store. “Custom Spaces saw sequential improvement in comparable store sales declines from the second quarter driven by improved performance in our elfa product line and strength in our premium, wood-based line, Preston. Despite the sales shortfall from our original guidance, promotional discipline and tight cost management enabled us to deliver bottom line results within our original outlook range.”
As the company navigates a challenging landscape, Malhotra said the company plans to continue managing expenses and capital allocation with great discipline.
“We continue to lean into our competitive strengths and differentiation in Custom Spaces and complementary premium general merchandise, where we see significant growth opportunity.”
For the fourth quarter ending March 30, the home goods specialty retailer is forecasting consolidated net sales of between $200 million and $205 million. Comparable store sales are expected to decline in the mid-twenties. Net loss per diluted share is expected between -$0.12 and -$0.09.
