The Container Store Receives Delisting Warning from NYSE
The New York Stock Exchange (NYSE) has warned the Container Store that it is at risk of being delisted because its average closing stock price dropped below $1.00 over the last 30 trading days.
The Container Store said in a statement it is considering solutions to regain compliance, including a reverse stock split to reduce the number of outstanding shares and increase the price per share. This move is subject to stockholder approval no later than the company’s next stockholder meeting. Until then, the retailer will remain listed on the NYSE and can regain compliance at any time over the next six months.
The delisting warning comes as the Container Stores’s Q4, which ended March 30, 2024, and fiscal 2023 results paint a relatively bleak picture for the retailer. Consolidated net sales for 2023 were $849.8 million, down 19% compared to fiscal 2022. Comparable store sales also fell 19.7% year over year. Results for the quarter saw an even greater deficit: Consolidated net sales for Q4 2023 were down nearly 21% versus Q4 2022. While net sales for the Container Store retail business dropped 20.4%, Elfa International third-party net sales fell even more (24.6%).
One bright spot in the earnings report was the Container Store’s Custom Spaces business, which contributed to the retailer’s consolidated gross margin of 57.7%, an increase of 30 basis points for the year. “Looking ahead, while we anticipate continued challenges within our general merchandise offerings, we continue to lean into Custom Spaces through enhancing our assortment, strengthening our in-home design service and building awareness through impactful marketing campaigns that highlight our complete offerings,” said Satish Malhotra, CEO and President of The Container Store in a statement. “We plan to push forward on all of our market share driving initiatives to ensure we are poised to capitalize on the significant opportunities for the business and the brand when the backdrop normalizes.”
The Container Store is the latest of a number of brands that have received delisting warnings in recent years, including Grove Collaborative in 2023 and now-bankrupt Express in April 2023. Most recently, former DTC darling Allbirds announced its noncompliance with Nasdaq’s minimum bid requirement in April 2024.
