Is The Container Store back on track? Posts smaller than expected loss

New York -- The Container Store may have exceeded the expectations it set for itself in the first quarter, but its results were decidedly mixed.



The company lost $5.2 million, or 11 cents a share in the first quarter, compared to a loss of $3.6 million, or seven cents a share, the prior year. The retailer had forecast a loss between 12 cents and 14 cents and analysts pegged the number at 13 cents.



Total sales declined 2.1% to $169.8 million in part because of a $5.2 million foreign exchange headwind.



Same-store sales declined for the fifth consecutive quarter, dropping 0.9% compared to a prior year first quarter decline of 0.8%. West Coast port delays were said to have cost the retailer about 1% point of comp growth. The company had forecast a more severe decline of 3% to 4%.



“Our first quarter financial performance exceeded our expectations, as we delivered better than forecasted comparable store sales and improved gross margin,” said Kip Tindell, chairman and CEO. “The implementation of our three major strategic initiatives – TCS Closets, Contained Home and POP! – remains on track, as planned, and we’re encouraged by the start of the ‘snowballing effect’ on their results. As we expected, we’ve seen that, in general, our stores with the strongest comparable store sales increases are the ones that have had TCS Closets and Contained Home the longest. In fact, if we isolate our seven Dallas-area stores, TCS Closets alone added three percentage points of incremental comparable store sales to those stores in the first quarter of fiscal 2015. We remain confident in, and are maintaining, our previously stated sales and EPS outlook for the fiscal year.”



The company opened its first of 10 planned stores for fiscal 2015 – in Tucson, Arizona – to end the quarter with 71 stores compared to 66 units in operation at the end of the first quarter the prior year.



More recently, a new store opened in Overland Park, Kansas, with other new stores planned for Columbus, Ohio; Yonkers, New York; Milwaukee, Phoenix; Christiana, Delaware; Oxnard, California; Sacramento; and Alpharetta, Georgia.