Container Store Shares Tumble As Q4 Results Miss View, Outlook Weak

(RTTNews) - Shares of Container Store Group, Inc. (TCS) plunged 25 percent in extended trades on Monday after the storage and organization products retailer's financial results for the fourth quarter missed analysts' estimates and it also provided weak outlook for the first quarter as well as fiscal 2015.

The company reported a 29 percent decline in profit for the fourth quarter from last year, noting that its quarterly results were hurt by inclement winter weather and foreign exchange headwinds.

Kip Tindell, Chairman and CEO of Container Store said, "Our fourth quarter did not conclude according to early-in-the-quarter trends. Weather was a contributing factor, as we experienced winter storms in February during the vitally important last 4 days of our 50-day Annual elfa Sale and during the last week of our 19-day Sale's extension."

Coppell, Texas-based Container Store's net income for the fourth quarter was $13.05 million or $0.27 per share, down from $18.34 million or $0.38 per share in the year-ago period.

Excluding items, adjusted net income for the quarter was $0.24 per share, compared to $0.22 per share in the year-ago quarter.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 3 percent to $224.26 million from $216.82 million in the same quarter last year, but missed analysts' consensus revenue estimate of $233.64 million.

Comparable store sales for the quarter declined 0.8 percent.

Net sales for the Container Store retail business grew 6 percent to $204.7 million, primarily due to new store sales.

Elfa third party sales increased 6.2 percent in local currency primarily due to stronger sales in the Nordic market. However, due to the appreciation of the U.S. dollar against the Swedish krona, Elfa third party net sales in U.S. dollars decreased 14.9 percent in the quarter.

Gross margin for the quarter contracted 40 basis points to 57.8 percent.

The company opened seven new stores in fiscal 2014 and relocated one store, and achieved its targeted 12 percent square footage growth.

Looking ahead to the first quarter, the company expects loss of $0.14 to $0.12 per share, and comparable store sales to decline 3 percent to 4 percent. Analysts expect loss of $0.06 per share for the quarter.

For fiscal 2015, the company now expects earnings of $0.30 to $0.38 per share on net sales of $800 million to $815 million, and comparable store sales change of a negative 2 percent to 0 percent.

Street expects the company to report earnings of $0.56 per share for the year on revenues of $873.10 million.

The company said its outlook assumes costs related to its investment activities as well as the impact of West Coast port delays.

TCS closed Monday's regular trading at $21.69, up $0.22 or 1.02 percent on a volume of 1.01 million shares. However, in after-hours, the stock declined $5.54 or 25.54 percent to $21.69.