Container Store Group Inc (NYSE:TCS) reported fourth quarter net sales fell 2.9% year over year to $305.55 million, beating consensus of $279.82 million .
Gross margin contracted 237 basis points to 56.9% and operating income decreased 27.5% year-on-year to $36.96 million, with a margin of 12.1%, down 411 basis points.
Adjusted EPS was $0.46, above the consensus of $0.26. Adjusted EBITDA was reduced to $45.84 million (-22.1% year-over-year) and margin contracted by 374 basis points to 15.2%.
Container Store generated cash from operations for FY21 of $56.99 million, compared to $136.66 million a year ago. Free cash flow of $23.6 million.
As of April 2, 2022, the Company’s store base was 94, compared to 93 stores as of April 3, 2021.
“We are excited to resume store growth with a plan to open two new stores in fiscal 2022 and a plan for an additional 74 new stores by fiscal 2027. This growth, coupled with our base more productive store operations and disciplined expense management, is expected to translate into low double-digit operating margins over time as inflationary headwinds subside,” commented Satish Malhotra, CEO .
Long-term financial goals: The company expects to achieve $2 billion in consolidated net sales and more than double EPS by the end of fiscal 2027. It expects to generate low double-digit annual growth in sales and the opening of 76 new stores by the end of the fiscal year. end of fiscal year 2027.
Outlook for 1Q22: Container Store achieves mid-single-digit net sales growth and comparable store sales growth. He expects EPS of $0.15 to $0.20.
FY22 Outlook: The company expects net sales of approximately $1.125 billion versus a consensus of $1.09 billion and same-store sales growth in the single digits. It expects EPS of $1.20 to $1.30 versus consensus of $1.27 and plans to open two stores. Capital expenditures of $60-65 million.
Price Action: Shares of TCS are trading up 10.601% at $7.97 in Tuesday’s aftermarket session.
