Seeking Alpha

The Container Store -9.3% AH, investors underwhelmed by outlook

  • The Container Store (TCS) shares plunge 9.3% in AH trading after the company posts an EPS beat and slight revenue miss in FQ1 but issues guidance that isn't all investors hoped for.
  • The high-flying IPO sees FY2013 sales of $754M vs. analyst expectations of $756.2M on a comparable stores sales increase of 3.4% and 6 store openings. Forecast EPS of $0.40 is above analyst expectations of $0.38.
  • Comp sales in FQ1 were up 4.7%; however with the average ticket up 5.8%, the figures imply negative traffic trends.
  • PRConference call at 4:30pm ET
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Comments (2)
  • Weighing Machine
    , contributor
    Comments (795) | Send Message
     
    Pretty high multiple for a slow growing company
    7 Jan 2014, 06:28 PM Reply Like
  • MisterEC
    , contributor
    Comments (92) | Send Message
     
    The pace of revenue growth has been accelerating each year since fiscal 2010. The adjusted EBITDA margin in that time has gone from 9.9% to 12.4%, so as dollars flow into stores more quickly, more of each is going to the bottom line. And although the company is only recently profitable, its solid cash flow (as well as money raised from the IPO) is allowing it to pick up the pace of expansion after several slow years. Another bonus is a recent credit upgrade from Moody's that will lower borrowing costs for any future debt. Cash flow from operations for the quarter ended Aug. 31 was up 150% from the prior year, while free cash flow swung from negative to positive.
    8 Jan 2014, 01:53 PM Reply Like
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