Container Store explodes higher after sales beat, layoff announcement

The Container StoreFlickr/DavidThe Container Store

The Container Store Group’s stock surged 37% to $US5.67 a share after the company reported fourth-quarter results that beat analysts’ expectations and announced a restructuring plan.

Net sales for the period were $US221 million, exceeding consensus estimates of $US213 million. The specialty retail chain also provided full-year 2017 guidance, saying net sales would be between $US830 million to $US850 million, and forecasting earnings per share of $US0.25 to $US0.35. Both beat analyst estimates.

“We are very pleased to have completed fiscal 2016 with strong fourth quarter performance that exceeded our expectations across all financial metrics,” CEO Melissa Reiff said in a statement. “We have initiatives in progress to drive sales productivity improvements.”

The Container Store also announced a four-part optimization plan to boost profits, which includes sales initiatives, the elimination of certain full-time positions, organisation realignment at shelving subsidiary Elfa, as well as savings efforts. The company forecasts that the plan will result in annualized pre-tax savings of $US20 million, of which roughly $US12 million to $US15 million will be realised in 2017.

The stock surge is good news for Container Store shareholders, who have seen the company’s price plunge by almost 50% since reaching an almost one-year high on December 9.

NOW WATCH: Here’s why the American flag is reversed on military uniforms

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.