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The Container Store Beats on Earnings and Revenue

Posted by on May 23, 2017 9:28 PM
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Categories: Stocks

May 23, 2017: The Container Store reports Q4 (Feb) EPS of $0.17 versus the $0.09 estimate. Revenues also beat rising 5.3% YoY to $221 million versus the $212.98 million estimate.

Melissa Reiff, Chief Executive Officer, said, “We are very pleased to have completed fiscal 2016 with strong fourth quarter performance that exceeded our expectations across all financial metrics. Our Custom Closets business continues to positively contribute to comparable store sales and we’ve seen sales trends improve in our other product categories driven by new and more targeted marketing campaigns, as well as merchandising improvements.

In fiscal 2016 we implemented our SG&A savings and efficiency program, which drove a substantial improvement in profitability with a full year operating income increase of 67% compared to fiscal 2015 and a three-fold increase in earnings per share to $0.31.

As we begin fiscal 2017, we remain committed to consistently driving top and bottom line performance that we believe The Container Store is capable of delivering. We have initiatives in progress to drive sales productivity improvements, including a complete re-design of our flagship store in Dallas, which we believe will provide us insight for the development of new store formats and the evolution of our existing stores’ layout and customer experience. In addition, today we are announcing a four-part plan to optimize our consolidated business and drive improved sales and profitability.”

February 12, 2017: Insider buying was detected in The Container Store last week. The Container Store is in oversold territory after reporting an earnings and revenue miss on February 7, 2017. The company reported Q3 EPS of $0.11 versus the $0.13 estimate. Revenue also missed coming in at $216.4 million versus the $224 million estimate. The company said, “Our custom closets business, specifically elfa(R) and TCS Closets(R), drove incremental sales and profit; however, holiday department sales were disappointing during the quarter and, as we expected, our annual elfa(R) sale was impacted by fewer selling days combined with Christmas and New Year’s Eve holidays falling on weekends. We’re nearing completion of our new long-term strategic plan that outlines our goals and priorities and our roadmap to achieving them. We look forward to sharing its central elements by June. Fundamental to this plan is leveraging our key differentiators and implementing new strategies to achieve top-line sales growth and maximizing the productivity of our stores by aligning our marketing, merchandising, in-store and online experience with the evolving expectations of today’s consumer.”

January 17, 2017: Morgan Stanley cuts the The Container Store to Underweight from Equal Weight and sets a price target of $5. Morgan Stanley does not expect the business to inflect over the next 12 months and the stock trades at an elevated multiple relative to other home furnishing retailers.

The Container Store Stock Chart

The Finviz screener settings used to find The Container Store are: P/E Low (<15), Forward P/E Under 20, PEG Low (<1), EPS growth qtr over qtr 390% – 400%, Institutional Transactions Positive (>0%), Insider Transactions Positive (>0%)

Originally established with one store in 1978, The Container Store has grown to be the leading specialty retailer of storage and organization products in the United States and the only national retailer solely devoted to the category. Our goal is to help provide order to an increasingly busy and chaotic world. We provide creative, multifunctional, customizable storage and organization solutions that help our customers save time, save space and improve the quality of their lives. We believe our commitment to the category, breadth of product assortment, passionate employees and focus on solutions-based selling create a long-lasting bond with our customers and foster devotion to The Container Store brand. As a result, we continue to expand our base of passionate, enthusiastic and loyal customers, which we believe will further drive our growth and profitability.


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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on unless specifically stated in the article. Owner of Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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