Dive Brief:
-
The Container Store on Tuesday reported consolidated net sales rose 7% to $209.5 million in the first quarter. Net sales in the company's retail business increased 8.3% to $195.1 million, while third-party net sales fell 8.3% to $14.4 million, which the company attributed to foreign currency translation.
-
Comparable store sales rose 7.8% in the quarter, according to a company press release, with sales from Custom Closets increasing 11.1% year over year. The Container Store also announced the opening of its first Custom Closets store in Los Angeles.
-
Consolidated net loss was $4.1 million from $6.8 million in the year-ago quarter. Adjusted EBITDA was $10.6 million, down from $12.4 million in the year-ago period, which the company attributed to marketing expenses from its Custom Closets business and opening its second distribution center.
Dive Insight:
The opening of its first store dedicated solely to custom closets is part of a shift The Container Store is making to offer more "solutions" rather than just products, CEO Melissa Reiff said on a call with analysts. The company said that in addition to ramping up the custom closets offerings in its Reston, Virginia, store, a second Custom Closets location will open in Dallas by the end of this year.
"Our number one focus continues to be owning custom closets and capturing greater share of the estimated $6 billion custom closets market," Reiff said, adding that the Custom Closets business represents half of the company's consolidated sales and execs believe it will continue to grow.
Beyond its brick-and-mortar operations, though, the company also saw a 29.2% increase in its online business.
The company in the first quarter also added private label collections in its closet and kitchen departments, with plans to expand even further. "We see much opportunity ahead across the entire store to expand our private label," Reiff said.
The Container Store is maintaining its outlook for the year, expecting net sales to be between $915 million and $925 million, and same-store sales to increase between 2% and 3%.
