The Container Store Group, Inc. Announces First Quarter 2024 Financial Results
The Container Store Group (NYSE: TCS) reported its Q1 2024 financial results. Key Highlights:
Consolidated net sales fell by 12.2% year-over-year to $181.9 million. Comparable store sales decreased by 13.7%, with general merchandise categories down 21.8%. Custom Spaces sales rose by 1.9%.
The net loss was $14.7 million, or $0.30 per diluted share, compared to a net loss of $11.8 million, or $0.24 per diluted share, in Q1 2023. Adjusted net loss was $12.7 million, or $0.26 per diluted share, up from $10.1 million, or $0.21 per diluted share, in Q1 2023.
Gross margin improved to 58.3%, driven by lower freight costs and decreased promotional activity. SG&A expenses decreased 5.4% to $105.4 million but increased as a percentage of net sales to 57.9%.
New store openings and relocations contributed to an increase in the store base to 103. The company is not providing financial guidance as it evaluates strategic alternatives.
Il Gruppo Container Store (NYSE: TCS) ha riportato i risultati finanziari del Q1 2024. Principali Punti Salienti:
Le vendite nette consolidate sono diminuite del 12,2% rispetto all'anno precedente, attestandosi a 181,9 milioni di dollari. Le vendite nei negozi comparabili sono diminuite del 13,7%, con le categorie di merce generale in calo del 21,8%. Le vendite di Custom Spaces sono aumentate dell'1,9%.
La perdita netta è stata di 14,7 milioni di dollari, ovvero 0,30 dollari per azione diluita, rispetto a una perdita netta di 11,8 milioni di dollari, o 0,24 dollari per azione diluita, nel Q1 2023. La perdita netta rettificata è stata di 12,7 milioni di dollari, pari a 0,26 dollari per azione diluita, rispetto ai 10,1 milioni di dollari, o 0,21 dollari per azione diluita, nel Q1 2023.
Il margine lordo è migliorato al 58,3%, grazie a costi di spedizione più bassi e a una diminuzione delle attività promozionali. Le spese SG&A sono diminuite del 5,4% a 105,4 milioni di dollari, ma sono aumentate come percentuale delle vendite nette al 57,9%.
Le nuove aperture di negozi e le relocazioni hanno contribuito a un incremento della base di negozi a 103. L'azienda non fornisce guidance finanziaria mentre valuta alternative strategiche.
Container Store Group (NYSE: TCS) reportó sus resultados financieros del primer trimestre de 2024. Puntos Clave:
Las ventas netas consolidadas cayeron un 12,2% interanual, alcanzando 181,9 millones de dólares. Las ventas en tiendas comparables disminuyeron un 13,7%, con las categorías de mercancías generales cayendo un 21,8%. Las ventas de Custom Spaces aumentaron un 1,9%.
La pérdida neta fue de 14,7 millones de dólares, o 0,30 dólares por acción diluida, en comparación con una pérdida neta de 11,8 millones de dólares, o 0,24 dólares por acción diluida, en el Q1 2023. La pérdida neta ajustada fue de 12,7 millones de dólares, o 0,26 dólares por acción diluida, en comparación con 10,1 millones de dólares, o 0,21 dólares por acción diluida, en el Q1 2023.
El margen bruto mejoró al 58,3%, impulsado por costos de flete más bajos y una disminución de la actividad promocional. Los gastos SG&A disminuyeron un 5,4% a 105,4 millones de dólares, pero aumentaron como porcentaje de las ventas netas al 57,9%.
Las nuevas aperturas de tiendas y reubicaciones contribuyeron a un aumento en la base de tiendas a 103. La compañía no está proporcionando orientación financiera mientras evalúa alternativas estratégicas.
컨테이너 스토어 그룹 (NYSE: TCS)은 2024년 1분기 재무 결과를 발표했습니다. 주요 하이라이트:
통합 순매출이 전년 대비 12.2% 감소하여 1억 8,190만 달러에 이를었습니다. 동일 매장 매출은 13.7% 감소하였고, 일반 상품 카테고리는 21.8% 감소했습니다. Custom Spaces 매출은 1.9% 증가했습니다.
순 손실은 1,470만 달러, 즉 희석 주당 0.30 달러로, 2023년 1분기의 순 손실 1,180만 달러, 즉 희석 주당 0.24 달러와 비교됩니다. 조정된 순 손실은 1,270만 달러, 즉 희석 주당 0.26 달러로, 2023년 1분기 1,010만 달러, 즉 희석 주당 0.21 달러에서 증가했습니다.
총 이익률은 58.3%로 개선되었으며, 이는 물류비 절감과 판촉 활동 감소에 기인합니다. SG&A 비용은 5.4% 감소하여 1억 5,540만 달러가 되었으나, 순매출 대비 비율은 57.9%로 증가했습니다.
새로운 매장 개설과 이전이 매장 수 증가에 기여하여, 총 103개 매장이 되었습니다. 기업은 전략적 대안을 평가하는 동안 재무 전망을 제공하지 않고 있습니다.
Le Groupe Container Store (NYSE: TCS) a annoncé ses résultats financiers pour le T1 2024. Principales Faits Saillants :
Les ventes nettes consolidées ont chuté de 12,2% d'une année sur l'autre pour atteindre 181,9 millions de dollars. Les ventes en magasin comparables ont diminué de 13,7%, avec les catégories de marchandises générales en baisse de 21,8%. Les ventes de Custom Spaces ont augmenté de 1,9%.
La perte nette était de 14,7 millions de dollars, soit 0,30 dollars par action diluée, contre une perte nette de 11,8 millions de dollars, soit 0,24 dollars par action diluée, au T1 2023. La perte nette ajustée était de 12,7 millions de dollars, soit 0,26 dollars par action diluée, en hausse par rapport à 10,1 millions de dollars, soit 0,21 dollars par action diluée, au T1 2023.
La marge brute s'est améliorée à 58,3%, grâce à une baisse des coûts du fret et à une réduction de l'activité promotionnelle. Les dépenses SG&A ont diminué de 5,4% pour atteindre 105,4 millions de dollars, mais elles ont augmenté en pourcentage des ventes nettes à 57,9%.
Les nouvelles ouvertures de magasins et les relocalisations ont contribué à l'augmentation de la base de magasins à 103. L'entreprise ne fournit pas de prévisions financières alors qu'elle évalue des alternatives stratégiques.
Die Container Store Group (NYSE: TCS) hat ihre finanziellen Ergebnisse für das 1. Quartal 2024 bekannt gegeben. Wichtige Highlights:
Die konsolidierten Nettoumsätze fielen im Jahresvergleich um 12,2 % auf 181,9 Millionen USD. Der Umsatz in vergleichbaren Geschäften sank um 13,7 %, während die allgemeinen Warengruppen um 21,8 % zurückgingen. Die Umsätze von Custom Spaces stiegen um 1,9 %.
Der Nettoverlust betrug 14,7 Millionen USD, oder 0,30 USD pro verwässerter Aktie, verglichen mit einem Nettoverlust von 11,8 Millionen USD, oder 0,24 USD pro verwässerter Aktie, im 1. Quartal 2023. Der bereinigte Nettoverlust betrug 12,7 Millionen USD, oder 0,26 USD pro verwässerter Aktie, gegenüber 10,1 Millionen USD, oder 0,21 USD pro verwässerter Aktie, im 1. Quartal 2023.
Die Bruttomarge verbesserte sich auf 58,3 %, unterstützt durch niedrigere Frachtrate und reduzierte Werbeaktivitäten. Die SG&A Ausgaben sanken um 5,4 % auf 105,4 Millionen USD, stiegen jedoch als Prozentsatz des Nettoumsatzes auf 57,9 %.
Neue Ladenöffnungen und Standortverlegungen trugen zur Erhöhung der Filialanzahl auf 103 bei. Das Unternehmen gibt keine finanziellen Prognosen ab, während es strategische Alternativen prüft.
- Gross margin increased to 58.3%, up 300 basis points.
- SG&A expenses decreased by $6 million.
- Custom Spaces sales grew by 1.9%.
- Net sales decreased by 12.2% to $181.9 million.
- Comparable store sales declined by 13.7%.
- Net loss increased to $14.7 million, or $0.30 per diluted share.
- Adjusted net loss rose to $12.7 million, or $0.26 per diluted share.
- Online sales dropped by 25.6%.
Insights
The Container Store's Q1 FY2024 results reveal significant challenges. Consolidated net sales dropped
Despite these headwinds, there are some positive signs. Gross margin improved by 300 basis points to
The company's liquidity position remains stable at
The Container Store's Q1 results reflect the broader challenges facing specialty retailers. The
The
The slight improvement in Q2 sales trends is encouraging, but the continued double-digit declines suggest a challenging road ahead for The Container Store.
The Container Store's Q1 results highlight shifting consumer behavior in the home organization sector. The strong performance of Custom Spaces, particularly in Garage+ and Decor+ by Elfa, indicates a growing preference for personalized, high-end storage solutions. This trend could be driven by a focus on home improvement as people continue to invest in their living spaces.
However, the significant decline in general merchandise categories suggests consumers may be cutting back on discretionary organizational products. This could be due to inflationary pressures or a saturation of basic storage solutions in homes post-pandemic.
The company's strategic focus on premium offerings like the Preston line, which had its best sales order quarter in history, appears to be a smart move in this environment. It allows The Container Store to target higher-margin sales and differentiate itself in a competitive market. The challenge will be balancing this premium strategy with the need to drive overall store traffic and sales volume.
First quarter consolidated net sales of
Comparable store sales^ down
First quarter loss per share of
For the first quarter of fiscal 2024:
-
Consolidated net sales were
$181.9 million 12.2% , compared to the first quarter of fiscal 2023. Net sales in The Container Store retail business (“TCS”) were$171.5 million 12.1% . Elfa International AB (“Elfa”) third-party net sales were$10.3 million 13.7% compared to the first quarter 2023. Excluding the impact of foreign currency translation, Elfa third-party net sales were down12.4% . -
Comparable store sales^ decreased
13.7% , with general merchandise categories down21.8% , contributing a decrease of 1,440 basis points to comparable store sales^. Custom Spaces+ were up1.9% , positively impacting comparable store sales^ by 70 basis points. -
Consolidated net loss and net loss per share were
$14.7 million $0.30 $11.8 million $0.24 $0.26 $0.21
Satish Malhotra, Chief Executive Officer and President of The Container Store, commented, “Our first quarter sales results continued to be impacted by ongoing macro-related headwinds though we were encouraged by sequential monthly improvement over last year in general merchandise and Custom Spaces. The sequential improvement in Custom Spaces resulted in positive comparable sales growth for the quarter. We attribute this change in sales trajectory to the strength of our Garage+ and Decor+ by Elfa launches, and our premium wood-based line Preston, which had the best sales order quarter in its history. Additionally, we were excited by the positive customer response to our recent new and relocated stores and look forward to the two remaining new stores we have planned in this fiscal year. While we cannot control the current macro environment, we are pleased with the progress we are making on our initiatives and continue to believe in the opportunities ahead as more and more customers realize the power of organization.”
First Quarter Fiscal 2024 Results
For the first quarter (thirteen weeks) ended June 29, 2024:
-
Consolidated net sales were
$181.9 million 12.2% , compared to the first quarter of fiscal 2023.-
Net sales in TCS were
$171.5 million 12.1% . -
Comparable store sales^ decreased
13.7% , with general merchandise categories down21.8% , contributing a decrease of 1,440 basis points to comparable store sales^. Custom Spaces+ were up1.9% , positively impacting comparable store sales^ by 70 basis points. -
Online sales decreased
25.6% compared to the first quarter of fiscal 2023. -
Elfa third-party net sales were
$10.3 million 13.7% compared to the first quarter of fiscal 2023. Excluding the impact of foreign currency translation, Elfa third-party net sales were down12.4% primarily due to a decline in sales in Nordic markets.
-
Net sales in TCS were
-
Consolidated gross margin was
58.3% , an increase of 300 basis points, compared to the first quarter of fiscal 2023. TCS gross margin increased 340 basis points to57.9% primarily due to lower freight costs, decreased promotional activity, and favorable product and services mix. Elfa gross margin increased 470 basis points compared to the first quarter of fiscal 2023 primarily due to price increases to customers. -
Consolidated selling, general and administrative expenses (“SG&A”) decreased
$6.0 million 5.4% to$105.4 million $111.4 million 57.9% , with the increase primarily due to deleverage of fixed costs associated with lower sales and increased marketing spend in the first quarter of fiscal 2024. -
A non-cash long-lived asset impairment charge of
$0.9 million -
Consolidated other expenses was
$1.7 million -
Consolidated net interest expense increased
10.1% to$5.5 million $5.0 million -
The effective tax rate was
23.4% in the first quarter of fiscal 2024, as compared to23.3% in the first quarter of fiscal 2023. -
Net loss was
$14.7 million $0.30 $11.8 million $0.24 $12.7 million $0.26 $10.1 million $0.21 -
Adjusted EBITDA* was
$1.7 million $2.9 million
New and Existing Stores
As of June 29, 2024, the Company store base was 103 as compared to 97 as of July 1, 2023. The Company opened one store and relocated one store during the first quarter of fiscal 2024. Subsequent to the end of the first quarter of fiscal 2024, the Company opened a new store in
Balance sheet and liquidity highlights:
(In thousands) (unaudited) |
|
June 29, 2024 |
|
July 1, 2023 |
||||
|
|
|
|
|||||
Cash |
|
$ |
44,088 |
|
|
$ |
12,155 |
|
Total debt, net of deferred financing costs |
|
$ |
216,734 |
|
|
$ |
185,388 |
|
Liquidity1 |
|
$ |
95,446 |
|
|
$ |
94,187 |
|
Net cash used in operating activities |
|
$ |
(8,110 |
) |
|
$ |
(2,988 |
) |
Free cash flow* |
|
$ |
(16,709 |
) |
|
$ |
(11,886 |
) |
________________________________________
(1) Cash plus availability on revolving credit facilities. |
Share repurchase
There were no repurchases during the first quarter of fiscal 2024. The Company has
Fiscal 2024 To Date Commentary
As the Company continues to evaluate strategic alternatives, it is not providing financial guidance. The Container Store has not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any particular outcome. The Container Store does not intend to comment further regarding the review of strategic alternatives until it determines disclosure is necessary or advisable.
Jeff Miller, Chief Financial Officer, commented, "Second quarter fiscal 2024 to date, our year over year sales decline has improved slightly from the decline we just reported for the first quarter of fiscal 2024. Our performance continues to be driven by relative strength in our Custom Spaces business with year over year growth in our Elfa and Preston product lines. However, our general merchandise category remains challenged resulting in double-digit year-over-year total sales declines, though not of the magnitude reported for the first quarter of fiscal 2024."
References
* See Reconciliation of GAAP to Non-GAAP Financial Measures table.
+ Custom Spaces includes metal-based and wood-based custom space products and in-home installation services.
^ Comparable store sales includes all net sales from our TCS segment, except for sales from stores open less than sixteen months, stores that have been closed permanently, stores that have been closed temporarily for more than seven days and C Studio sales to third parties.
Conference Call Information
A conference call to discuss first quarter fiscal 2024 financial results is scheduled for today, August 6, 2024, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-407-3982 (international callers please dial 201-493-6780) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.containerstore.com.
A taped replay of the conference call will be available within three hours of the conclusion of the call and can be accessed both online and by dialing 844-512-2921 (international callers please dial 412-317-6671). The pin number to access the telephone replay is 13744077. The replay will be available until September 6, 2024.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our strategic alternatives review process, second quarter fiscal 2024 to date sales trends, our goals, strategies, priorities, challenges and initiatives, growth opportunities, and expected store openings and closures.
These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the timeline for the completion of the strategic alternatives review process is unknown and there can be no assurance that the process will result in any particular outcome; the sales trends for second quarter 2024 to-date discussed in this press release are preliminary and subject to change as the quarter progresses; a decline in the health of the economy and the purchase of discretionary items; results of operations and financial condition; our ability to continue to lease space on favorable terms; costs and risks relating to new store openings; quarterly and seasonal fluctuations in our operating results; cost increases that are beyond our control; our inability to protect our brand; our failure or inability to protect our intellectual property rights; our inability to source and market new products to meet consumer preferences; failure to successfully anticipate, or manage inventory commensurate with, consumer preferences and demand; our inability to obtain merchandise from our vendors on a timely basis and at competitive prices; vendors may sell similar or identical products to our competitors; our and our vendors’ vulnerability to natural disasters and other unexpected events; disruptions at our manufacturing facilities; product recalls and/or product liability, as well as changes in product safety and other consumer protection laws; risks relating to operating multiple distribution centers and domestic and international manufacturing facilities; our dependence on foreign imports for our merchandise; our reliance upon independent third party transportation providers; our inability to effectively manage our online sales; effects of a security breach or cyber-attack of our website or information technology systems, including relating to our use of third-party web service providers; damage to, or interruptions in, our information systems as a result of external factors, working from home arrangements, staffing shortages and difficulties in updating our existing software or developing or implementing new software; failure to comply with laws and regulations relating to privacy, data protection, and consumer protection; our indebtedness may restrict our current and future operations, and we may not be able to refinance our debt on favorable terms, or at all; fluctuations in currency exchange rates; our inability to maintain sufficient levels of cash flow to meet growth expectations; our fixed lease obligations; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; changes to global markets and inability to predict future interest expenses; our reliance on key executive management; our inability to find, train and retain key personnel; labor relations difficulties; increases in labor costs; violations of the
These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, (the “SEC”) on May 28, 2024 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
About The Container Store
The Container Store Group, Inc. (NYSE: TCS) is the nation’s leading specialty retailer of organizing solutions, custom spaces, and in-home services – a concept they originated in 1978. Today, with locations nationwide, the retailer offers more than 10,000 products designed to transform lives through the power of organization.
Visit www.containerstore.com for more information about products, store locations, services offered and real-life inspiration.
Follow The Container Store on Facebook, X, Instagram, TikTok, YouTube, Pinterest and LinkedIn.
The Container Store Group, Inc.
|
||||||||
|
|
Fiscal Quarter Ended |
||||||
(In thousands, except share and per share amounts) (unaudited) |
|
June 29,
|
|
July 1,
|
||||
|
|
|
||||||
Net sales |
|
$ |
181,861 |
|
|
$ |
207,112 |
|
Cost of sales (excluding depreciation and amortization) |
|
|
75,766 |
|
|
|
92,563 |
|
Gross profit |
|
|
106,095 |
|
|
|
114,549 |
|
Selling, general, and administrative expenses (excluding depreciation and amortization) |
|
|
105,350 |
|
|
|
111,380 |
|
Stock-based compensation |
|
|
318 |
|
|
|
474 |
|
Pre-opening costs |
|
|
747 |
|
|
|
185 |
|
Depreciation and amortization |
|
|
10,873 |
|
|
|
10,512 |
|
Long-lived asset impairment charges |
|
|
901 |
|
|
|
— |
|
Other expenses |
|
|
1,686 |
|
|
|
2,453 |
|
(Gain) loss on disposal of assets |
|
|
(23 |
) |
|
|
1 |
|
Loss from operations |
|
|
(13,757 |
) |
|
|
(10,456 |
) |
Interest expense, net |
|
|
5,468 |
|
|
|
4,967 |
|
Loss before taxes |
|
|
(19,225 |
) |
|
|
(15,423 |
) |
Benefit for income taxes |
|
|
(4,493 |
) |
|
|
(3,586 |
) |
Net loss |
|
$ |
(14,732 |
) |
|
$ |
(11,837 |
) |
|
|
|
|
|
||||
Net loss per common share — basic and diluted |
|
$ |
(0.30 |
) |
|
$ |
(0.24 |
) |
|
|
|
|
|
||||
Weighted-average common shares — basic and diluted |
|
|
49,665,345 |
|
|
|
49,252,869 |
|
The Container Store Group, Inc.
|
|||||||||
(In thousands) |
|
June 29,
|
|
March 30,
|
|
July 1,
|
|||
Assets |
|
(unaudited) |
|
|
|
(unaudited) |
|||
Current assets: |
|
|
|
|
|
|
|||
Cash |
|
$ |
44,088 |
|
$ |
21,000 |
|
$ |
12,155 |
Accounts receivable, net |
|
|
22,609 |
|
|
22,010 |
|
|
21,870 |
Inventory |
|
|
157,758 |
|
|
158,434 |
|
|
170,512 |
Prepaid expenses |
|
|
14,001 |
|
|
12,940 |
|
|
14,624 |
Income taxes receivable |
|
|
4,571 |
|
|
5,118 |
|
|
964 |
Other current assets |
|
|
8,870 |
|
|
11,046 |
|
|
9,985 |
Total current assets |
|
|
251,897 |
|
|
230,548 |
|
|
230,110 |
Noncurrent assets: |
|
|
|
|
|
|
|||
Property and equipment, net |
|
|
152,791 |
|
|
155,402 |
|
|
157,747 |
Noncurrent operating lease right-of-use assets |
|
|
401,927 |
|
|
400,188 |
|
|
353,402 |
Goodwill |
|
|
— |
|
|
— |
|
|
23,447 |
Trade names |
|
|
146,632 |
|
|
146,449 |
|
|
219,894 |
Deferred financing costs, net |
|
|
84 |
|
|
97 |
|
|
137 |
Noncurrent deferred tax assets, net |
|
|
485 |
|
|
393 |
|
|
517 |
Other assets |
|
|
4,853 |
|
|
3,288 |
|
|
2,702 |
Total noncurrent assets |
|
|
706,772 |
|
|
705,817 |
|
|
757,846 |
Total assets |
|
$ |
958,669 |
|
$ |
936,365 |
|
$ |
987,956 |
The Container Store Group, Inc.
|
||||||||||||
(In thousands, except share and per share amounts) |
|
June 29,
|
|
March 30,
|
|
July 1,
|
||||||
Liabilities and shareholders’ equity |
|
(unaudited) |
|
|
|
(unaudited) |
||||||
Current liabilities: |
|
|
|
|
|
|
||||||
Accounts payable |
|
$ |
60,815 |
|
|
$ |
59,873 |
|
|
$ |
53,305 |
|
Accrued liabilities |
|
|
66,970 |
|
|
|
70,076 |
|
|
|
68,218 |
|
Current portion of long-term debt |
|
|
2,181 |
|
|
|
2,166 |
|
|
|
2,055 |
|
Current operating lease liabilities |
|
|
62,045 |
|
|
|
60,692 |
|
|
|
59,996 |
|
Income taxes payable |
|
|
261 |
|
|
|
280 |
|
|
|
670 |
|
Total current liabilities |
|
|
192,272 |
|
|
|
193,087 |
|
|
|
184,244 |
|
Noncurrent liabilities: |
|
|
|
|
|
|
||||||
Long-term debt |
|
|
214,553 |
|
|
|
174,611 |
|
|
|
183,333 |
|
Noncurrent operating lease liabilities |
|
|
379,472 |
|
|
|
378,524 |
|
|
|
320,845 |
|
Noncurrent deferred tax liabilities, net |
|
|
20,146 |
|
|
|
24,185 |
|
|
|
45,062 |
|
Other long-term liabilities |
|
|
6,585 |
|
|
|
6,267 |
|
|
|
5,394 |
|
Total noncurrent liabilities |
|
|
620,756 |
|
|
|
583,587 |
|
|
|
554,634 |
|
Total liabilities |
|
|
813,028 |
|
|
|
776,674 |
|
|
|
738,878 |
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity: |
|
|
|
|
|
|
||||||
Common stock, |
|
|
498 |
|
|
|
496 |
|
|
|
494 |
|
Additional paid-in capital |
|
|
874,203 |
|
|
|
873,927 |
|
|
|
872,536 |
|
Accumulated other comprehensive loss |
|
|
(33,039 |
) |
|
|
(33,443 |
) |
|
|
(34,113 |
) |
Retained deficit |
|
|
(696,021 |
) |
|
|
(681,289 |
) |
|
|
(589,839 |
) |
Total shareholders’ equity |
|
|
145,641 |
|
|
|
159,691 |
|
|
|
249,078 |
|
Total liabilities and shareholders’ equity |
|
$ |
958,669 |
|
|
$ |
936,365 |
|
|
$ |
987,956 |
|
The Container Store Group, Inc.
|
||||||||
|
|
Fiscal Quarter Ended |
||||||
(In thousands) (unaudited) |
|
June 29,
|
|
July 1,
|
||||
Operating activities |
|
|
||||||
Net loss |
|
$ |
(14,732 |
) |
|
$ |
(11,837 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
10,873 |
|
|
|
10,512 |
|
Stock-based compensation |
|
|
318 |
|
|
|
474 |
|
Long-lived asset impairment charges |
|
|
901 |
|
|
|
— |
|
(Gain) loss on disposal of assets |
|
|
(23 |
) |
|
|
1 |
|
Deferred tax benefit |
|
|
(4,334 |
) |
|
|
(3,975 |
) |
Non-cash interest |
|
|
471 |
|
|
|
471 |
|
Other |
|
|
362 |
|
|
|
193 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
(830 |
) |
|
|
5,894 |
|
Inventory |
|
|
771 |
|
|
|
(234 |
) |
Prepaid expenses and other assets |
|
|
(736 |
) |
|
|
1,173 |
|
Accounts payable and accrued liabilities |
|
|
(1,620 |
) |
|
|
(8,707 |
) |
Net change in lease assets and liabilities |
|
|
(99 |
) |
|
|
4,101 |
|
Income taxes |
|
|
531 |
|
|
|
(739 |
) |
Other noncurrent liabilities |
|
|
37 |
|
|
|
(315 |
) |
Net cash used in operating activities |
|
|
(8,110 |
) |
|
|
(2,988 |
) |
|
|
|
|
|
||||
Investing activities |
|
|
|
|
||||
Additions to property and equipment |
|
|
(8,599 |
) |
|
|
(8,898 |
) |
Investments in non-qualified plan trust |
|
|
(22 |
) |
|
|
(128 |
) |
Proceeds from non-qualified plan trust redemptions |
|
|
311 |
|
|
|
83 |
|
Proceeds from sale of property and equipment |
|
|
52 |
|
|
|
1 |
|
Net cash used in investing activities |
|
|
(8,258 |
) |
|
|
(8,942 |
) |
|
|
|
|
|
||||
Financing activities |
|
|
|
|
||||
Borrowings on revolving lines of credit |
|
|
— |
|
|
|
12,799 |
|
Payments on revolving lines of credit |
|
|
— |
|
|
|
(15,180 |
) |
Borrowings on long-term debt |
|
|
40,000 |
|
|
|
20,000 |
|
Payments on long-term debt |
|
|
(543 |
) |
|
|
(518 |
) |
Payment of taxes with shares withheld upon restricted stock vesting |
|
|
(40 |
) |
|
|
(140 |
) |
Net cash provided by financing activities |
|
|
39,417 |
|
|
|
16,961 |
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
|
39 |
|
|
|
166 |
|
|
|
|
|
|
||||
Net increase in cash |
|
|
23,088 |
|
|
|
5,197 |
|
Cash at beginning of fiscal period |
|
|
21,000 |
|
|
|
6,958 |
|
Cash at end of fiscal period |
|
$ |
44,088 |
|
|
$ |
12,155 |
|
Note Regarding Non-GAAP Information
This press release includes financial measures that are not calculated in accordance with GAAP, including adjusted net income (loss), adjusted net income (loss) per common share - diluted, Adjusted EBITDA, and free cash flow. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. These non-GAAP measures should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP and they should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures are key metrics used by management, the Company’s board of directors, and Leonard Green and Partners, L.P., to assess its financial performance.
The Company presents adjusted net income (loss), adjusted net income (loss) per common share - diluted, and Adjusted EBITDA because it believes they assist investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance and because the Company believes it is useful for investors to see the measures that management uses to evaluate the Company. These non-GAAP measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. In evaluating these non-GAAP measures, you should be aware that in the future the Company will incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of these non-GAAP measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using non-GAAP measures supplementally. These non-GAAP measures are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.
The Company defines adjusted net income (loss) as net income (loss) before restructuring charges, severance charges, acquisition-related costs, impairment charges related to intangible assets, loss on extinguishment of debt, certain losses (gains) on disposal of assets, legal settlements and the tax impact of these adjustments and other unusual or infrequent tax items. We define adjusted net income (loss) per common share - diluted as adjusted net income (loss) divided by the diluted weighted average common shares outstanding. We use adjusted net income (loss) and adjusted net income (loss) per common share - diluted to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. We present adjusted net income (loss) and adjusted net income (loss) per common share - diluted because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance and because we believe it is useful for investors to see the measures that management uses to evaluate the Company.
The Company defines EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is calculated in accordance with the Company’s credit facilities and is one of the components for performance evaluation under its executive compensation programs. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items, including certain non-cash and other items that the Company does not consider in its evaluation of ongoing operating performance from period to period. The Company uses Adjusted EBITDA in connection with covenant compliance and executive performance evaluations, and to supplement GAAP measures of performance to evaluate the effectiveness of its business strategies, to make budgeting decisions and to compare its performance against that of other peer companies using similar measures. The Company believes it is useful for investors to see the measures that management uses to evaluate the Company, its executives and its covenant compliance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry.
The Company presents free cash flow, which the Company defines as net cash provided by operating activities in a period minus payments for property and equipment made in that period, because it believes it is a useful indicator of the Company’s overall liquidity, as the amount of free cash flow generated in any period is representative of cash that is available for debt repayment, investment, and other discretionary and non-discretionary cash uses. Accordingly, we believe that free cash flow provides useful information to investors in understanding and evaluating our liquidity in the same manner as management. Our definition of free cash flow is limited in that it does not solely represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows. Although other companies report their free cash flow, numerous methods may exist for calculating a company’s free cash flow. As a result, the method used by our management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.
Additionally, this press release refers to the change in Elfa third-party net sales after the conversion of Elfa’s net sales from Swedish krona to
The Container Store Group, Inc. Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
(unaudited)
The table below reconciles the non-GAAP financial measures of adjusted net income (loss) and adjusted net income (loss) per common share - diluted with the most directly comparable GAAP financial measures of GAAP net income (loss) and GAAP net income (loss) per common share - diluted.
|
Fiscal Quarter Ended |
||||||
|
June 29,
|
|
July 1,
|
||||
Numerator: |
|
|
|
||||
Net loss |
$ |
(14,732 |
) |
|
$ |
(11,837 |
) |
Long-lived asset impairment charges(a) |
|
901 |
|
|
|
— |
|
Severance and retention charges(b) |
|
53 |
|
|
|
2,453 |
|
Strategic alternatives fees(c) |
|
1,632 |
|
|
|
— |
|
Taxes(d) |
|
(547 |
) |
|
|
(749 |
) |
Adjusted net loss |
$ |
(12,693 |
) |
|
$ |
(10,133 |
) |
|
|
|
|
||||
Denominator: |
|
|
|
||||
Weighted-average common shares — basic and diluted |
|
49,665,345 |
|
|
|
49,252,869 |
|
|
|
|
|
||||
Net loss per common share — basic and diluted |
$ |
(0.30 |
) |
|
$ |
(0.24 |
) |
|
|
|
|
||||
Adjusted net loss per common share — diluted |
$ |
(0.26 |
) |
|
$ |
(0.21 |
) |
________________________________________
(a) |
|
Non-cash long-lived asset impairment charge was recorded in the first quarter of fiscal 2024 related to a store which has been identified for closure in fiscal 2024, which we do not consider in our evaluation of ongoing performance. |
(b) |
|
Severance and retention charges recorded in other expenses in the first quarter of fiscal 2024 and 2023, which we do not consider in our evaluation of ongoing performance. |
(c) |
|
Expenses associated with legal and professional fees related to our review of strategic alternatives incurred in the first quarter of fiscal 2024, which we do not consider in our evaluation of ongoing performance. |
(d) |
|
Tax impact of adjustments to net loss that are considered to be unusual or infrequent tax items, all of which we do not consider in our evaluation of ongoing performance. |
The table below reconciles the non-GAAP financial measure Adjusted EBITDA with the most directly comparable GAAP financial measure of GAAP net income (loss).
|
Fiscal Quarter Ended |
||||||
|
June 29,
|
|
July 1,
|
||||
Net loss |
$ |
(14,732 |
) |
|
$ |
(11,837 |
) |
Depreciation and amortization |
|
10,873 |
|
|
|
10,512 |
|
Interest expense, net |
|
5,468 |
|
|
|
4,967 |
|
Benefit for income taxes |
|
(4,493 |
) |
|
|
(3,586 |
) |
EBITDA |
$ |
(2,884 |
) |
|
$ |
56 |
|
Pre-opening costs(a) |
|
747 |
|
|
|
185 |
|
Non-cash lease expense(b) |
|
(132 |
) |
|
|
(174 |
) |
Long-lived asset impairment charges(c) |
|
901 |
|
|
|
— |
|
Stock-based compensation(d) |
|
318 |
|
|
|
474 |
|
Foreign exchange losses (gains)(e) |
|
2 |
|
|
|
(75 |
) |
Severance and retention charges(f) |
|
53 |
|
|
|
2,453 |
|
Strategic alternatives fees(g) |
|
1,632 |
|
|
|
— |
|
Non-cash inventory reserve(h) |
|
1,081 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
1,718 |
|
|
$ |
2,919 |
|
________________________________________
(a) |
|
Non-capital expenditures associated with opening new stores and relocating stores, including marketing expenses, travel and relocation costs, and training costs. We adjust for these costs to facilitate comparisons of our performance from period to period. |
(b) |
|
Reflects the extent to which our annual GAAP operating lease expense has been above or below our cash operating lease payments. The amount varies depending on the average age of our lease portfolio (weighted for size), as our GAAP operating lease expense on younger leases typically exceeds our cash operating lease payments, while our GAAP operating lease expense on older leases is typically less than our cash operating lease payments. |
(c) |
|
Non-cash long-lived asset impairment charge was recorded in the first quarter of fiscal 2024 related to a store which has been identified for closure in fiscal 2024, which we do not consider in our evaluation of ongoing performance. |
(d) |
|
Non-cash charges related to stock-based compensation programs, which vary from period to period depending on volume and vesting timing of awards. We adjust for these charges to facilitate comparisons from period to period. |
(e) |
|
Realized foreign exchange transactional gains/losses our management does not consider in our evaluation of ongoing performance. |
(f) |
|
Severance and retention charges recorded in other expenses in the first quarter of fiscal 2024 and 2023, which we do not consider in our evaluation of ongoing performance. |
(g) |
|
Expenses associated with legal and professional fees related to our review of strategic alternatives incurred in the first quarter of fiscal 2024, which we do not consider in our evaluation of ongoing performance. |
(h) |
|
Non-cash charges related to lower of cost or market inventory reserve, which was recorded in the first quarter of fiscal 2024, which we do not consider in our evaluation of ongoing performance. |
The table below reconciles the non-GAAP financial measure of free cash flow with the most directly comparable GAAP financial measure of net cash provided by operating activities.
|
Thirteen Weeks Ended |
||||||
|
June 29,
|
|
July 1,
|
||||
Net cash used in operating activities |
$ |
(8,110 |
) |
|
$ |
(2,988 |
) |
Less: Additions to property and equipment |
|
(8,599 |
) |
|
|
(8,898 |
) |
Free cash flow |
$ |
(16,709 |
) |
|
$ |
(11,886 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240806644923/en/
Investors:
ICR, Inc.
Farah Soi/Caitlin Churchill
203-682-8200
Farah.Soi@icrinc.com
Caitlin.Churchill@icrinc.com
or
Media:
The Container Store Group, Inc.
Carson Netherton, 972-538-6402
publicrelations@containerstore.com
Source: The Container Store Group, Inc.
FAQ
What were The Container Store's Q1 2024 net sales?
How did comparable store sales for TCS change in Q1 2024?
What was The Container Store's net loss per share in Q1 2024?
What was the adjusted net loss per diluted share for TCS in Q1 2024?
How did The Container Store's gross margin change in Q1 2024?
