Container Store Group Q3 Loss Widens

(RTTNews) - Container Store Group Inc. (TCS) Tuesday reported a wider loss for the third quarter, hurt largely by IPO related costs despite growth in revenues. Shares of the company slumped over eight percent in after-hours trade, following the news.

Container Store, reporting its first earnings results after going public in November, said its third-quarter loss widened to $25.08 million from $15.59 million in the same period last year. On a per-share basis, loss narrowed to $1.39 from $5.32 last year, due to higher number of shares outstanding.

Bottom line for the quarter was impacted by IPO-related stock-based compensation expenses of $14.6 million.

Excluding special items, adjusted earnings for the quarter were $5.2 million or $0.11 per share. On average, seven analysts polled by Thomson Reuters expected earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

The company's revenues improved 7.3 percent to $188.3 million from $175.4 million a year ago. Analysts expected sales of $188.89 million for the quarter.

Comparable store sales increased by 4.7 percent over last year.

Chief Executive Kip Tindell said, "Our net sales increase of 7.3 percent was fueled by our retail business at The Container Store, where sales increased 10.8 percent. We saw strong performance across new and existing stores as comparable store sales increased 4.7 percent; our fourteenth consecutive quarter of comparable store sales increases."

Third-quarter gross margin was 60 percent, an increase of 60 basis points compared to the third quarter last year. Selling, general and administrative expenses increased by 8.7 percent to $88.8 million.

Looking ahead to fiscal year 2013, the company currently expect adjusted earnings in the range of $0.40 per share on revenues of $754 million.

TCS closed Tuesday's trading at $45.79, up $2.81 or 6.54%, on the NYSE. The stock however, lost $3.69 or 8.06% in the after hours trade.