Investing.com -- Shares in Container Store Group Inc (NYSE:TCS) fell sharply on Monday in after-hours trading after the Dallas-based specialty retail chain store company said its earnings over its last quarter plunged by more than 60% during the three-month period.
The Container Store saw it profits shrink dramatically during its second quarter, which ended in late-August, due to an aggressive expansion campaign and the negative effects of currency translation from a stronger dollar. For the three-month period, The Container Store increased its revenue by 1.2% to $195 million and posted earnings of $2.7 million or 0.06 per share. By comparison, the company reported earnings of approximately $7 million or 0.14 per share over the same period in 2014.
Analysts expected the company to report per share earnings of 0.07 on revenue of $198 million.
Kip Tindell, the CEO of The Container Store, is still confident his company can finish with a strong second half to its fiscal year on the back of the rollout of its TCS Closets collection – a luxury line that is currently available at more than 60 of its stores nationwide.
"Our sales performance in the second quarter exceeded our expectations with positive comparable store sales, a result of even more strategic customer engagement and service initiatives, coupled with the ‘snowballing effect’ of our major initiatives,” Tindell said in a statement. “The benefit from TCS Closets to our comparable store sales more than doubled from the first quarter to second quarter of fiscal 2015."
The Container Store also saw its gross margin fall from 58.8% to 58.2% for the quarter.
"I am proud of the solid execution across our entire organization during the ongoing rollout of our major strategic initiatives, including TCS Closets and Contained Home," Tindell added. "With initiatives of this magnitude and complexity, we believe it is vitally important to make the appropriate investments in order to ensure their future success."
Shares in The Container Store plummeted 1.57 or 10.00% in after-hours trading to 14.00.