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Container Store Group, Inc. (TCS) SEC Filing 10-Q Quarterly report for the period ending Saturday, June 29, 2019

Container Store Group, Inc.

CIK: 1411688 Ticker: TCS

Exhibit 99.1

Picture 1

The Container Store Group, Inc. Announces First Quarter Fiscal 2019 Financial Results

First Quarter Comparable Store Sales up 7.8%; Consolidated Net Sales up 7.0%

First Quarter EPS of ($0.08) vs ($0.14) in Q118; Adjusted EPS of ($0.08) vs ($0.08) in Q118

 

Coppell, TX — July 30, 2019

 — The Container Store Group, Inc. (NYSE: TCS) (the “Company”), today announced financial results for the first quarter of fiscal 2019 ended June 29, 2019.

·

Consolidated net sales were $209.5 million, up 7.0%.  Net sales in The Container Store retail business (“TCS”) were $195.1 million, up 8.3%.  Elfa International AB (“Elfa”) third-party net sales were $14.4 million, down 8.3% due to foreign currency translation.

·

Comparable store sales increased 7.8%, with Custom Closets up 11.1%, contributing 500 basis points of the increase in comparable store sales, and all other product categories up 5.1%  contributing the remaining 280 basis points.  

·

Consolidated net loss and net loss per share (“EPS”) was $4.1 million and ($0.08) compared to a  net loss of $6.8 million and ($0.14), respectively, in the first quarter of fiscal 2018.  Adjusted net loss per share (“Adjusted EPS”) was ($0.08) compared to ($0.08) in the first quarter of fiscal 2018 (see Reconciliation of GAAP to Non-GAAP Financial Measures table).

 “We are very pleased with our strong start to fiscal 2019, as our reinvigorated marketing campaigns and refreshed merchandise assortment across our core Custom Closets business and other product categories, resonated with customers both in store and online. Our entire organization is more agile today, allowing us to quickly react to marketing opportunities,  leverage social influencers, as well as capitalize on the heightened awareness and interest in the category of Storage and Organization overall. Combining our agility with our merchandising strategies that include a comprehensive Custom Closets offering,  freshness and newness across all product categories, and our unique solutions-based selling approach, we believe we are well positioned for the remainder of the fiscal year and beyond. We are also making good progress against each of our key fiscal 2019 priorities, including increasing our Custom Closets brand awareness and opening our second distribution center in late fiscal 2019, that is currently on time and on budget.”

First Quarter Fiscal 2019 Results

For the first quarter (thirteen weeks) ended June 29, 2019:

·

Consolidated net sales were $209.5 million, up 7.0% as compared to the first quarter of fiscal 2018. Net sales at TCS were $195.1 million, up 8.3%,  driven by an increase in comparable store sales of 7.8%, combined with incremental sales from new stores. Elfa third-party net sales were $14.4 million, down 8.3% compared to the first quarter of fiscal 2018, due to the negative impact of foreign currency translation during the quarter.

·

Consolidated gross margin was 57.2%, a decrease of 140 basis points, compared to the first quarter of fiscal 2018, primarily due to a  higher mix of lower margin products and services sold in the first quarter of fiscal 2019. TCS gross margin decreased 50  basis points to 57.4%,  primarily due to successful marketing and merchandising campaigns that drove a higher mix of campaign driven sales. The decrease was partially offset

 

1

 

by improvement in foreign currency translation.  Elfa gross margin declined 100 basis points primarily due to higher direct materials costs attributable to higher raw material prices and a weaker Swedish krona. 

·

Consolidated selling, general and administrative expenses (“SG&A”) increased by 2.3% to $109.0 million in the first quarter of fiscal 2019 from $106.6 million in the first quarter of fiscal 2018. SG&A as a percentage of net sales decreased 240 basis points. This was primarily due to Optimization Plan expenses incurred in the prior year that were not incurred in the first quarter of fiscal 2019 and ongoing savings and efficiency efforts.  These decreases were partially offset by increased Custom Closets marketing expenses and costs associated with the second distribution center.  

·

Consolidated net interest expense decreased 27.8% to $5.7 million in the first quarter of fiscal 2019 from $7.9 million in the first quarter of fiscal 2018. In September 2018, the Company amended its Senior Secured Term Loan Facility, which decreased the applicable interest rate margins.   

·

The effective tax rate was 30.5%, as compared to 34.0% in the first quarter of fiscal 2018. The decrease in the effective tax rate is primarily due to the remeasurement of deferred tax balances in the first quarter of fiscal 2018 as a result of a change in the Swedish tax rate.

·

Net loss was $4.1  million, or ($0.08) per share, in the first quarter of fiscal 2019 compared to  a net loss of $6.8 million, or ($0.14) per share in the first quarter of fiscal 2018. Adjusted net loss was $4.1 million, or ($0.08) per share, in the first quarter of fiscal 2019 compared to adjusted net loss of $4.0 million, or ($0.08) per share in the first quarter of fiscal 2018 (see Reconciliation of GAAP to Non-GAAP Financial Measures table).

·

Adjusted EBITDA (see Reconciliation of GAAP to Non-GAAP Financial Measures table) was $10.6 million in the first quarter of fiscal 2019 compared to $12.4 million in the first quarter of fiscal 2018. The decrease in Adjusted EBITDA was primarily due to planned incremental Custom Closets marketing expense and expenses associated with the opening of a second distribution center that were incurred in the first quarter of fiscal 2019.

Balance sheet and liquidity highlights:

 

 

 

 

 

 

 

(In thousands)

    

June 29, 2019

    

June 30, 2018

Cash

 

$

11,404

 

$

14,102

Total debt, net of deferred financing costs

 

$

289,438

 

$

299,707

Liquidity (1)

 

$

82,709

 

$

84,710

Free cash flow (2)

 

$

(17,024)

 

$

(7,776)


The following information was filed by Container Store Group, Inc. (TCS) on Tuesday, July 30, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Container Store Group, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Loss
Consolidated Statements Of Comprehensive Loss (Parenthetical)
Consolidated Statements Of Operations
Consolidated Statements Of Shareholders' Equity
Consolidated Statements Of Shareholders' Equity (Parenthetical)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss (Details)
Accumulated Other Comprehensive Loss (Tables)
Commitments And Contingencies
Commitments And Contingencies (Details)
Components Of Lease Costs (Details)
Description Of Business And Basis Of Presentation
Description Of Business And Basis Of Presentation (Details)
Description Of Business And Basis Of Presentation (Policies)
Description Of Business And Basis Of Presentation - Leases (Details)
Detail Of Certain Balance Sheet Accounts
Detail Of Certain Balance Sheet Accounts (Details)
Detail Of Certain Balance Sheet Accounts (Tables)
Fair Value Measurements
Fair Value Measurements (Details)
Fair Value Measurements (Tables)
Foreign Currency Forward Contracts
Foreign Currency Forward Contracts (Details)
Income Taxes
Income Taxes (Details)
Leases
Leases (Details)
Leases (Tables)
Leases - Future Minimum Lease Payments (Details)
Net Loss Per Common Share
Net Loss Per Common Share (Details)
Net Loss Per Common Share (Tables)
Segment Reporting
Segment Reporting (Tables)
Segment Reporting - (Details)
Segment Reporting - Reconciliation Of Ebitda (Details)
Stock-Based Compensation
Stock-Based Compensation (Details)
Supplemental Cash Flow Information (Details)
Weighted Average Remaining Operating Lease Term And Incremental Borrowing Rate (Details)

Material Contracts, Statements, Certifications & more

Container Store Group, Inc. provided additional information to their SEC Filing as exhibits

Ticker: TCS
CIK: 1411688
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-19-006620
Submitted to the SEC: Wed Jul 31 2019 4:01:15 AM EST
Accepted by the SEC: Wed Jul 31 2019
Period: Saturday, June 29, 2019
Industry: Retail Home Furniture Furnishings And Equipment Stores

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