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What's happening?
Shares of The Container Store (TCS -0.46%) have lost over 20% in early trading on Tuesday after the company's second-quarter earnings report disappointed investors on Monday evening.
Why it's happening
The Container Store's second-quarter revenue came in at $193.2 million, which was short of Wall Street's expectations for $199.1 million on the top line, and its $0.11 in adjusted EPS was in line with expectations. The specialty retailer also disappointed investors with its full-year guidance, which now calls for revenue to range from $800 million to $810 million (down from a range of $820 million to $830 million), with EPS ranging from $0.41 to $0.46. Analysts had been expecting $822 million in revenue and $0.50 in EPS, so both guidance ranges were understandably disappointing.
Container Store's big problem this quarter was a drop in same-store sales, which came in 0.4% lower year-over-year. This is expected to continue into the third quarter, with company guidance anticipating same-store sales to be "flat to down low single digits" in the third quarter before increasing by low- to mid-single digits in the fourth quarter.
