The Container Store's disappointing earnings report can be summed up this way: it's not us, it's the consumer.
After the close yesterday, the company reported earnings below expectations and said full year profit and revenue expectations would also be below expectations. Negative comparative store sales was a surprise, since guidance has been for up 3 to 4 percent for the year.
Overall, TCS's woes are a problem, because without consistent comp store growth (think Costco), the bulls are going to re-evaluate their enthusiasm for the company. Here's are additional thoughts from Chairman and CEO Kip Tindell:
"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 the weather and calendar. Consistent with so many of our fellow retailers, we are experiencing a retail 'funk'… we continue to experience slight traffic declines in this surprisingly tepid retail environment. While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014 - so we're not alone in this."
This is strange, considering that TCS is known to have higher-income households that are supposedly in better shape than everyone else. While they are not Nordstrom, it's definitely attracts higher-end consumers. Williams Sonoma are is doing well, but Bob Evans also reported sales short of estimates, and cut earnings guidance for the year.