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The Container Store tops estimates; raises fiscal outlook

Despite store closures amid a damaging hurricane season, The Container Store topped analysts' estimates for its second quarter.

For the second quarter ended September 30, the retailer reported that net sales rose 6.5% to a better-than-expected $218.4 million. Net sales in company’s retail business rose 7% to $202.3 million. This included an estimated $1.4 million in lost sales associated with Hurricanes Harvey and Irma.

Same-store sales rose 1.9% — including the negative impact of the hurricanes. The company estimates that the comparable store sales headwind from the combined impact of Hurricane Harvey in Texas and Hurricane Irma in Florida was approximately 70 basis points.

The retailer reported a net loss of $0.9 million, compared to net income of $3.5 million in the year-ago period. Adjusted for one-time items, the company earned 12 cents a share, compared with 8 cents a year ago. Analysts had expected adjusted earnings of 6 cents a share.

“We are happy to deliver fiscal second quarter results that are ahead of our expectations on both the top and the bottom line, despite hurricane-related headwinds in our Texas and Florida markets, where we experienced temporary store closings in approximately 12% of our store base during the quarter,” said chief executive Melissa Reiff. “The improvement in our business was broad-based across product categories, and reflects the traction of our sales revitalization initiatives which, in combination with our efficiency and optimization efforts, is already driving an encouraging improvement in profitability as illustrated by the 50% increase in our Adjusted EPS in the second quarter.”

Reiff also credits the gains to initiatives across merchandising, marketing, store operations, customer experience and optimization efforts. Its optimization initiative, which was announced in May, is a four-part plan designed to drive improved sales and profitability.

All of these efforts prompted the retailer to raise its 2017 full year outlook across net sales, comparable store sales, and adjusted net income per common share.

"With the first half of the year behind us, we are raising our full year outlook and remain focused on building on our progress and driving the sales and profitability improvements we know this business is capable of,” added Reiff.
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