With Bed Bath & Beyond riding off into the liquidation sunset, investors are turning their attention to other struggling retailers. And one of those is The Container Store, whose shares are approaching all-time lows again. đŦ
The specialty retail chain reported adjusted earnings per share of $0.18, topping estimates by $0.02. However, revenues of $259.7 million fell short of the $265.72 million expected. đ
A negative foreign currency impact partially explains the weakness, but the broader issue remains the weaker macroeconomic environment. Comparable store sales fell 13.1%, and e-commerce sales fell 6.2% YoY, though gross margins did expand 190 basis points to 58.9%.Â
Sales weakness was the driver of other retailers going out of business, so investors anxiously awaited management’s plans to reverse the negative trend. In their press release, executives said they continue to focus on cost management. Meanwhile, they are investing in long-term strategic initiatives like Custom Spaces, e-commerce, and new innovative products designed to drive market share gains. đ
That said, there doesn’t appear to be an immediate solution to the retailer’s troubles. â ī¸
Executives offered a cautious outlook given what they’re seeing so far during the first quarter. They now expect fiscal year 2024 earnings per share of $0.21 to $0.31 on revenues of $885 to $900 million. Those missed estimates of $0.72 and $1.05 billion by a wide margin, as did their Q1 forecasts.
The gloomy outlook did little to contain investors’ fears that the retailer could be the next victim of the retail-pocalypse. $TCS shares added to regular session losses, falling another 15% after hours. đģ
