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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.
Alex Planes has no position in any stocks mentioned. The Motley Fool recommends The Container Store Group. The Motley Fool owns shares of The Container Store Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.