The Container Store Group (TCS) Reports In-Line Q2 EPS, FY14 Guidance Falls Short
The Container Store Group (NYSE: TCS) reported Q2 EPS of $0.11, in-line with the analyst estimate of $0.11. Revenue for the quarter came in at $193.2 million versus the consensus estimate of $199.24 million. Comps declined 0.4%.
“Our gross margin is strong, our SG&A expense management is strong, and we continued to achieve increased average ticket growth. We’re pleased that this, combined with our new store growth, helped drive our earnings performance with a 38.7% increase in adjusted net income, despite sluggish comparable store sales. We have maintained our pricing integrity in an increasingly promotional retail environment,” said Kip Tindell, Chairman and Chief Executive Officer. “We are very excited about our new store growth, with three more openings ahead of us this year. Our targeted annual 12% minimum square footage growth is among the fastest growth rates in the retail industry. We are encouraged by the prospects of our three major initiatives to help drive deeper engagement with our omni-channel customer and to increase traffic and average ticket — POP! TM, Contained Home TM and TCS Closets TM. TCS Closets is without a doubt the most significant merchandising initiative in our history, leveraging our core competency of high service sales of exclusive, solutions-based products and systems.”
The Container Store Group sees FY2014 EPS of $0.41 - $0.46, versus the consensus of $0.49. The Container Store Group sees FY2014 revenue of $800 - $810 million, versus the consensus of $821.29 million. Adjusted EBITDA is expected to be $95 to $99 million.
The Company also expects comparable store sales to be flat to down low single digits in the third quarter of fiscal 2014, and to increase in the low to mid-single digit range in the fourth quarter of fiscal 2014.
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