The Container Store (NYSE:TCS) has set an ugly tone for this upcoming earnings season. The housewares retailer lowered its outlook -- again -- and this time it's dashing the hopes of investors in general by talking up what it calls a "retail funk" that's coating the shopping landscape.
When The Container Store went public in November, it seemed as if the market was getting the opportunity to buy one of the retail realm's class acts. The Container Store is the trendy place in the suburban strip mall. It's the place to buy housewares and stylish storage boxes. It's the place to go when you want finally want to install that slick closet organization system.
At a time when there's growing sentiment to boost the pay scale of retail employees, The Container Store is one of the more notable chains that already pays pretty well. It brags about offering wages and salaries for its salespeople that are are as much as 50% to 100% higher than the industry average. Employees don't have to press hard on customers to ring up commissions, and when internal sales contests take place, they are done more to foster a friendly competitive spirit than to weed out the unfortunate.
However, The Container Store has a been a bit of a dud since going public. When earnings fell short of expectations during the holiday quarter, it blamed the weather. When the next quarter also missed analyst profit forecasts, it suggested that a calendar shift was to blame. Now that it's eyeing its third straight disappointing quarter since going public late last year, it's owning up to the fact that the winter snowstorms or Easter's shift from March to April this year weren't completely to blame when it failed to live up to the post-IPO hype.
The Container Store was one of a handful of companies that warned this past week, and the "retail funk" that the stumbling chain is alluding to may be a recurring theme if more consumer-facing companies disappoint this upcoming earnings season.
Briefly in the news
And now let's look at some of the other stories that shaped our week.
- Netflix (NASDAQ:NFLX) walked away with 31 Emmy nominations this week. No one will confuse Netflix for HBO, but we're still talking about more than doubling the 14 nominations that it rang up a year ago. It's clear that the movie and TV show universe is accepting premium streaming as a viable distribution outlet, and drumming up the respect of critics will make it that much easier to land hot new shows in the future.
- Keurig Green Mountain (NASDAQ:GMCR) has signed another deal with a major retailer to nab its private-label business. Keurig Green Mountain will provide Harris Teeter's grocery stores with the upscale supermarket chain's branded K-Cups. Life after patent expiration hasn't been so rough after all.
- Joe's Jeans (NASDAQ:JOEZ) posted better-than-expected earnings, offering up a small profit when analysts were targeting a deficit. This is the third quarter in a row that this has happened, leading one to wonder when Wall Street will get the memo.
Rick Munarriz owns shares of Keurig Green Mountain and Netflix. The Motley Fool recommends Keurig Green Mountain, Netflix, and The Container Store Group and owns shares of Netflix and The Container Store Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.