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Organizational product specialist Container Store Group (NYSE:TCS) found itself among the worst growth stocks of 2015, seeing its share price cut by more than half as investors were disappointed in the failure of the retailer to reach its full potential. Coming into the company's fiscal third-quarter financial report on Thursday, few investors have a lot of optimism about Container Store's near-term promise, but the real question that shareholders need answered is whether the company's long-term strategy will reward their patience. Let's look more closely at how Container Store has fared lately and whether this week will finally bring the good news that investors have waited so long to see from the specialty retailer.

Stats on Container Store Group

Analyst EPS Estimate

$0.05

Change From Year-Ago EPS

(29%)

Revenue Estimate

$199.64 million

Change From Year-Ago Revenue

4.6%

Earnings Beats in Past 4 Quarters

1

Data source: Yahoo! Finance.

Will Container Store get organized this year?
Container Store hasn't been able to generate much enthusiasm, and few see quick improvement for the retailer's earnings. Over the past few months, those following the stock have reined in their earnings expectations, cutting $0.01 from their fiscal third-quarter projections and making cuts of around 7% to their estimates for next fiscal year. The stock has responded as you'd expect, falling 42% since the end of September.

Container Store's fiscal second-quarter results showed the disconnect between what investors want to see from the company and the strategy that the retailer's management team is following. Sales rose just 1.2%, and net income fell by more than half from year-ago levels as the retailer was fortunate to eke out a small 0.1% gain in comparable-store sales. The strong dollar continued to hold back sales of the company's Elfa International products, but more broadly, Container Store expects that full-year comps will still at best break even compared to last year's performance. Yet even with the tepid performance, CEO Kip Tindell continued to emphasize the positive things that the company has done.

For its part, Container Store is still working hard to bolster its growth. The company expects to add 12% to its total square footage by the end of the fiscal year, and it continues to add new stores to its retail footprint. Concepts like the TCS Closets and Contained Home segments are generating extremely high-ticket sales, and Container Store is just getting started in expanding the availability of these programs across its store network. With the U.S. economy performing more strongly in recent years, homeowners are in a better position to afford improvements, and sales of organizational products like the ones that Container Store is well-known for should benefit from an abundance of discretionary income available for spending.

The good news from a long-term survival standpoint is that Container Store hasn't done anything to make its balance sheet look weaker lately. Long-term debt has stayed relatively stable in a range of $275 million to $350 million since early 2012. Cash on hand is limited, and goodwill and other intangibles make up the majority of Container Store's assets, raising questions about their true value. Nevertheless, relatively stable inventory levels also point to an ordinary course of business for the retailer.

In Container Store's earnings report, investors need to get the latest from Tindell on how he expects the company to move forward through its recent troubles. Gimmicks like the free gift-wrapping that it provided to holiday travelers in late December have been good to raise public awareness of the company's name, but Container Store still has to work harder to get those potential customers into its stores and get them to embrace the longer-term vision it offers. Without that kind of success in 2016, it'll be hard for Container Store stock to rebound from a horrible performance in 2015.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends 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.