Why Container Store Shares Are Climbing

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When the Container Store Group Inc. (NYSE: TCS) posted its fiscal fourth-quarter financial results late on Tuesday, the company said that it had $0.17 in earnings per share (EPS) and $221.0 million in revenue. Consensus estimates from Thomson Reuters had called for $0.09 in EPS on revenue of $214.73 million. In the same period of last year, the retailer posted EPS of $0.07 and $209.9 million in revenue.

Comparable store sales were down 0.2%. The Easter timing shift benefited the quarter’s comparable store sales by approximately 0.6%.

In terms of the outlook for fiscal 2017, the company expects to see EPS in the range of $0.25 to $0.35 and net sales between $830 million and $850 million. The consensus estimates are $0.24 in EPS and $839.59 million in revenue.

On the books, Container Store cash and cash equivalents totaled $10.74 million at the end of the quarter, down from $13.61 million at the end of the previous fiscal year.

CEO Melissa Reiff commented:

We are very pleased to have completed fiscal 2016 with strong fourth quarter performance that exceeded our expectations across all financial metrics. Our Custom Closets business continues to positively contribute to comparable store sales and we’ve seen sales trends improve in our other product categories driven by new and more targeted marketing campaigns, as well as merchandising improvements.

She added:

As we begin fiscal 2017, we remain committed to consistently driving top and bottom line performance that we believe The Container Store is capable of delivering. We have initiatives in progress to drive sales productivity improvements, including a complete re-design of our flagship store in Dallas, which we believe will provide us insight for the development of new store formats and the evolution of our existing stores’ layout and customer experience. In addition, today we are announcing a four-part plan to optimize our consolidated business and drive improved sales and profitability.

Shares were last seen up 30% at $5.39 on Wednesday, with a consensus analyst price target of $5.00 and a 52-week range of $3.75 to $8.34.