What happened

Shares of The Container Store Group, Inc. (NYSE:TCS) spiked last month after the organization-themed retailer reported a strong fourth-quarter earnings report and announced a restructuring. According to data from S&P Global Market Intelligence, the stock gained 40% last month.

A group of Container Store employees in front of a store

Image source: The Container Store.

As the chart below shows, the majority of the gains came when the company reported earnings on May 24.

TCS Chart

TCS data by YCharts.

So what 

The retailer's top-line performance was modest as revenue grew 5.3% to $221 million, while comparable sales fell 0.2%. Earnings per share, though, increased from $0.07 per share to $0.17 as operating costs fell, beating estimates at $0.10. 

CEO Melissa Reiff said she was "very pleased" that the company topped all of its expectations in the fourth quarter with encouraging results in the Custom Closets category. She also touted the company's cost-savings program that boosted operating income by 67% for the fiscal year.

The Container Store is going further with that strategy with an optimization plan that includes layoffs and management realignment in order to improve sales and profitability. It expects the new plan to boost annual earnings per share by $0.15-$0.19, though there will be some one-time costs at the start.

Now what 

Since The Container Store's stock collapsed following its 2013 IPO, the company has scaled back significantly on new store openings in order to streamline its business. With last quarter's result and the optimization plan, the stock looks arguably more promising now than it has in its entire public history. 

Management forecast revenue of $830-$850 million for the current year, and earnings per share of $0.25-$0.35. With today's challenging retail environment and the company's inability to deliver significant comparable sales growth, I wouldn't expect any fireworks from the stock, but it seems after years of digging that it's finally hit a floor.

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.