Container Store Loss Narrows, Stock Plunges On Outlook Cut

(RTTNews) - Shares of Container Store Group Inc. (TCS) plunged 14 percent in extended trade on Tuesday, after it slashed its full-year 2014 outlook. The company reported a loss for the first quarter, that narrowed from last year, reflecting the absence of hefty distributions for preference shareholders.

For the full fiscal year 2014, the company now expect earnings of $0.49 to $0.54 per share and revenues of $820 million to $830 million. Analysts polled by Thomson Reuters currently expect earnings of $0.57 per share with revenue of $830.98 million for the full year. Analysts' estimates typically exclude one-time items.

Earlier, the company expected earnings of $0.56 to $0.61 per share on revenues of $827 million to $837 million.

Container Store's first-quarter loss narrowed to $3.6 million or $0.07 per share from $27.1 million or $9.25 per share last year. Last year's bottom line was impacted by distributions accumulated to preferred shareholders of $22.3 million.

Adjusted loss for the quarter was $0.07 per share, same as last year. On average, nine analysts expected a loss of $0.06 per share for the quarter.

Sales for the quarter improved 8.6 percent to $173.4 million from $159.6 million last year. Analysts expected sales of $174.21 million for the quarter.

Comparable store sales declined by 0.8 percent over last year.

Chief Executive Kip Tindell said, "We thought our sluggish sales were all because of weather and calendar shifts that began last November and continued into the spring, but now we've come to realize it's more than weather and calendar. Consistent with so many of our fellow retailers, we are experiencing a retail 'funk'."

Gross margin for the first quarter dropped 30 basis points to 58.1 percent, while selling, general and administrative expenses increased by 9.3 percent to $91.2 million.

TCS closed Tuesday's trading at $27.07, down $0.45 or 1.64%, on the NYSE. The stock further dropped $3.92 or 14.48% in after-hours trade.