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What's happening?Shares of The Container Store Group fell more than 12% on Friday after the storage and organization retailer reported mixed fiscal third quarter results and reduced its full-year revenue outlook.
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Why it's happeningRevenue rose 1.4% year-over-year to $190.9 million for the quarter ended Nov. 29, helped primarily by new store sales, and hurt by a 3.5% decline in comparable store sales. For perspective, that decline was near the low end of The Container Store's guidance of flat to negative low-single-digit comps. In addition, the company said depreciation of the Swedish krona against the U.S. dollar negatively affected early revenue from its crucial annual Elfa sale to the tune of $2.6 million, which meant Elfa's third party net sales decreased by 8.6% in U.S. dollars. Measured in Swedish krona, Elfa's third party net sales actually increased by 1.9%.
Nonetheless, this still meant adjusted net income fell to $3.2 million, or $0.07 per share, compared to $5.2 million or $0.11 per share in the same year-ago period.Analysts, on average, were expecting EPS of $0.07 on higher sales of $199.2 million.
On the upside, management elaborated that comps and average tickets are up 2.7% and almost 2%, respectively, so far in the fourth quarter. Even so, after accounting for its third quarter weakness, The Container Store also lowered its full fiscal 2014 revenue guidance to a range of $785 million to $795 million, with net income per share of $0.52 to $0.55. It previously expected fiscal 2014 revenue of $800 million to $810 million, and earnings per share of $0.52 to $0.57.
The article Why The Container Store Group, Inc. Stock Plunged Today originally appeared on Fool.com.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends The Container Store Group. The Motley Fool owns shares of The Container Store Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.