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The Container Store Group (TCS) investor relations material

The Container Store Group Q2 2024 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Logotype for The Container Store Group Inc
Q2 2024 earnings summary29 Oct, 2024

Executive summary

  • Q2 2024 consolidated net sales declined 10.5% year-over-year to $196.6M, with comparable store sales down 12.5% and general merchandise down 18.7%, while Custom Spaces fell 1.5% but saw operational demand rise 4.5%.

  • Net loss narrowed to $16.1M ($4.85/share) from $23.7M last year; adjusted net loss was $10.7M ($3.23/share) vs. $0.4M income last year.

  • Adjusted EBITDA was $3.9M, down from $17M a year ago.

  • Announced $40M preferred equity investment from Beyond, Inc., contingent on refinancing or amending credit facilities.

  • 1-for-15 reverse stock split completed in September 2024, restoring NYSE compliance.

Financial highlights

  • Gross margin declined 210 bps to 55.5% in Q2, mainly due to increased promotions and unfavorable mix.

  • SG&A expenses were $105.2M (53.5% of sales), up as a percentage of sales due to deleverage and higher marketing spend.

  • Q2 2024 net loss: $16.1M; adjusted net loss: $10.7M; Q2 2024 adjusted EBITDA: $3.9M.

  • Free cash flow for H1 2024 was negative $10.6M, compared to negative $1.3M last year.

  • Cash at quarter end: $66.1M; total debt: $232M; total liquidity: $96.5M.

Outlook and guidance

  • No financial guidance provided due to pending Beyond, Inc. transaction; Q3 started challenging due to tough comparison with last year’s Elfa anniversary sale.

  • Persistently challenging retail environment and reduced consumer spending continue to impact performance.

  • Substantial doubt exists regarding ability to continue as a going concern without additional liquidity or credit facility modifications.

  • The company is actively working to amend or refinance credit facilities and close the Beyond equity investment.

  • Strategic priorities include growing Custom Spaces, stabilizing general merchandise, and increasing brand awareness.

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Frequently asked questions

The Container Store Group Inc operates a retail chain specializing in storage and organization products for home and office use. The company offers custom closets, shelving, and containers through physical stores and e-commerce platforms. The company is headquartered in Coppell, Texas, and its shares are listed on the NYSE.

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