What happened

Shares of The Container Store, Inc. (NYSE:TCS) were getting squeezed last month as the struggling retailer got hammered by weakness in the sector and some analyst downgrades.

The exterior of a Container Store location

Image source: The Container Store.

Though there was little company-specific news out during the month, those developments were enough to send the stock down 23% according to data from S&P Global Market Intelligence. As the chart below shows, the stock started falling on January 6, when department-store chains began reporting disappointing holiday sales, and it continued to slide from there. 

TCS Chart

TCS data by YCharts.

So what 

The Container Store shares fell 7.3% on January 6 after Macy's (NYSE:M) and Kohl's (NYSE:KSS) reported disappointing results in November and December. Comparable sales fell at both department-store chains, and they were forced to lower the earnings estimates for the quarter.

The news seemed to confirm what investors already suspected: that traditional retailers would lose the holiday season to e-commerce vendors. That conclusion weighed on The Container Store as the struggling organization-themed chain seems unable to find its niche in the larger retail industry, a problem that only grows with the rise of e-commerce. 

Later in the month, the stock was downgraded to a "strong sell" by Zack's and to "underweight" by Morgan Stanley. 

Now what

The Container Store brief history as a publicly traded stock has been nothing but painful for investors. The company debuted on the market with promising expansion plans and positive comparable sales, but comps quickly turned negative, and it has struggled to deliver a meaningful profit.

With competition from home-furnishing giant IKEA and e-commerce players, the investing thesis for The Container Store never seemed all that convincing. The company will report third-quarter earnings tomorrow, February 7. Analysts are expecting an $0.11 per-share profit and revenue of $218 million.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of The Container Store Group. The Motley Fool has a disclosure policy.