Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36161 THE CONTAINER STORE GROUP, INC. (Exact name of registrant as specified in its charter) (State or ot ...

The Container Store Group, Inc. (NYSE:TCS) Q2 2023 Earnings Conference Call October 31, 2023 4:30 PM ET Corporate Participants Caitlin Churchill - IR, ICR Satish Malhotra - President and Chief Executive Officer Jeff Miller - Chief Financial Officer Conference Call Participants Emily Ghosh - Goldman Sachs Operator Greetings, and welcome to The Container Store Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal ...

Q2 Fiscal 2023 Results (continued) Forward-Looking Statements • Q2 Fiscal 2023 Financial Results • Strategic Priorities Update • Q3 & Full Year Fiscal 2023 Financial Outlook • Appendix Q2 Fiscal 2023 Financial Results []] C 3 2 3 and the problem of the states Q2 Fiscal 2023 Results $219.7M Consolidated Net Sales ($0.48) Net Loss Per Diluted Share** | --- | --- | |-------|-------| | | | | $0.01 | | 19.4% decrease vs. Q2-22 $0.79 decrease vs. Q2-22 $0.27 decrease vs. Q2-22 57.6% Gross Margin (8.1%) Operating ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) For the transition period from to Commission File Number: 001-36161 THE CONTAINER STORE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 26-0565401 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 500 Freeport Parkway, Coppell, TX 75019 ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1 ...

Confidential ©2023 The Container Store Inc. All rights reserved. 20 Below is a reconciliation of the non-GAAP financial measures of adjusted net (loss) income and adjusted net (loss) income per common share – diluted to the GAAP financial measures of net (loss) income and net (loss) income per common share - diluted: ש The Container Store® AUGUST 1, 2023 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained ...

Start Time: 16:30 January 1, 0000 5:07 PM ET The Container Store Group, Inc. (NYSE:TCS) Q1 2023 Earnings Conference Call August 01, 2023, 16:30 PM ET Company Participants Satish Malhotra - President and CEO Jeff Miller - CFO Caitlin Churchill - IR, ICR Conference Call Participants Steven Forbes - Guggenheim Securities Ryan Meyers - Lake Street Capital Markets Kate McShane - Goldman Sachs Operator Greetings, and welcome to The Container Store First Quarter 2023 Earnings Call. At this time, all participants a ...

Part I [Business Overview](index=10&type=section&id=Item%201.%20Business) The Container Store Group is a leading specialty retailer of organizing solutions and custom spaces, generating $1.0 billion in fiscal 2022 sales - The company operates through two main segments: The Container Store (TCS), which accounted for approximately **95% of consolidated net sales** in fiscal 2022, and Elfa, which accounted for the remaining 5%[22](index=22&type=chunk) - The company's strategic vision is to achieve **$2 billion in annual sales** by focusing on three pillars: deepening customer relationships, expanding its reach, and strengthening capabilities[24](index=24&type=chunk)[37](index=37&type=chunk) - A significant portion of sales comes from exclusive or proprietary products; in fiscal 2022, **over half of annual sales** were from such products, with Elfa-produced items accounting for approximately **31% of TCS retail sales**[40](index=40&type=chunk)[48](index=48&type=chunk) Company Structure and Operations (Fiscal 2022) | Segment | Description | Store Count | FY2022 Net Sales (Share) | | :--- | :--- | :--- | :--- | | **The Container Store (TCS)** | Retail stores, website, call center, in-home services, and C Studio manufacturing | 97 | ~$991.4 million (95%) | | **Elfa** | Swedish subsidiary designing and manufacturing shelving, drawer systems, and sliding doors. Sells to TCS and third parties in ~30 countries | N/A | ~$55.9 million (5% to third parties) | [General Business Description](index=10&type=section&id=General) The company is a leading U.S. specialty retailer of organizing solutions, operating primarily through its TCS and Elfa segments - The company is the only national retailer solely devoted to organizing solutions, custom spaces, and in-home services[21](index=21&type=chunk) - The company operates **97 stores** in 34 states and the District of Columbia, with an average size of 24,000 square feet[22](index=22&type=chunk) - The company owns and operates C Studio Manufacturing, Inc in Elmhurst, Illinois, which produces the premium wood-based custom space product line, Preston™[22](index=22&type=chunk)[42](index=42&type=chunk) [Strategic Priorities](index=12&type=section&id=Strategic%20Priorities) The company's growth strategy focuses on deepening customer relationships, expanding its market reach, and strengthening operational capabilities - **Deepening Customer Relationships:** The Organized Insider Loyalty Program accounted for **nearly 80% of sales** since its introduction, with members spending approximately **57% more** than non-members[28](index=28&type=chunk) - **Expanding Reach:** The company opened three new small-format stores in fiscal 2022 and plans to open six more in fiscal 2023, with a long-term potential for an additional **76 new stores**[30](index=30&type=chunk) - **Strengthening Capabilities:** Investments were made in mobile express check-out, an upgraded in-store Custom Spaces design tool, and ESG initiatives, including offsetting **100% of energy use** with renewable energy[35](index=35&type=chunk)[36](index=36&type=chunk) [Key Differentiators](index=14&type=section&id=Our%20Key%20Differentiators) The company differentiates through its Custom Spaces offerings, vertically integrated Elfa business, and a curated, exclusive product assortment - The Container Store Custom Spaces, featuring exclusive brands like elfa®, Avera®, and Preston™, is a key differentiator; Elfa-produced products accounted for approximately **31% of TCS retail sales** in fiscal 2022[39](index=39&type=chunk)[40](index=40&type=chunk) - The multi-channel retail model is integral, with online channels collectively accounting for approximately **26% of TCS net sales** in fiscal 2022[45](index=45&type=chunk) - **Over half of annual sales** in fiscal 2022 came from exclusive or proprietary products, including **28% from private label products**[48](index=48&type=chunk) - The company maintains strong, long-lasting vendor relationships, with 15 of its top 20 vendors having been partners for **at least 10 years**[50](index=50&type=chunk) [Environmental, Social and Governance (ESG)](index=20&type=section&id=Environmental%2C%20Social%20and%20Governance) The company is advancing its ESG strategy by tracking emissions, using renewable energy, and ensuring supply chain ethics - The company published its first Sustainability Report in fiscal 2022 and is tracking **Scope 1 and Scope 2 GHG emissions**[36](index=36&type=chunk)[54](index=54&type=chunk) - The company offsets **100% of energy use** in its stores, distribution centers, and support center with renewable wind energy[36](index=36&type=chunk)[54](index=54&type=chunk) - As of April 1, 2023, the company had approximately **5,100 employees**, and the CEO has signed the CEO Action Pledge for Diversity & Inclusion[62](index=62&type=chunk)[63](index=63&type=chunk) - The company has a **zero-tolerance policy against modern slavery** and human trafficking and contractually requires suppliers to comply with labor laws[67](index=67&type=chunk)[68](index=68&type=chunk) [Manufacturing](index=24&type=section&id=Manufacturing) The company operates one domestic and three international manufacturing facilities for its Preston™, elfa®, and Avera® product lines - The company has one domestic manufacturing facility in Illinois for its Preston™ brand and three international facilities (two in Sweden, one in Poland) for its elfa® and Avera® brands[73](index=73&type=chunk)[74](index=74&type=chunk) [Distribution](index=24&type=section&id=Distribution) The company's distribution network is centered around two primary facilities in Texas and Maryland totaling 1.7 million square feet - TCS operates two primary distribution centers: one in Coppell, TX (~1.1M sq. ft.) and a second in Aberdeen, MD (~600,000 sq. ft.)[77](index=77&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from economic sensitivity, supply chain dependencies, IT threats, and financial leverage - **Consumer Behavior Risks:** Business is sensitive to economic conditions that influence discretionary spending, and failure to anticipate consumer demand can lead to inventory issues[99](index=99&type=chunk)[101](index=101&type=chunk) - **Supply Chain Risks:** Approximately **57% of merchandise** was purchased from foreign vendors in fiscal 2022 (including **33% from China**), exposing the company to tariffs and geopolitical risks[140](index=140&type=chunk)[141](index=141&type=chunk) - **Information Technology Risks:** The company is heavily reliant on IT systems and faces threats from cyber-attacks and the need to comply with complex data privacy laws like the CCPA and CPRA[115](index=115&type=chunk)[122](index=122&type=chunk) - **Liquidity and Financial Risks:** The company has significant debt (**$167.9 million** as of April 1, 2023) and is exposed to currency exchange rate fluctuations[153](index=153&type=chunk)[159](index=159&type=chunk) - **Accounting Risks:** The company recorded a significant non-cash goodwill impairment charge of **$197.7 million** in fiscal 2022 due to lower than expected operating results and changes in projections[187](index=187&type=chunk) [Unresolved Staff Comments](index=66&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - None[212](index=212&type=chunk) [Properties](index=66&type=section&id=Item%202.%20Properties) The company leases all 97 retail stores and its U.S. facilities, while its subsidiary Elfa owns three manufacturing facilities in Europe - As of April 1, 2023, the company leases all **97 of its retail stores** across 34 states and the District of Columbia[213](index=213&type=chunk) - Key leased facilities include a **1.1 million sq. ft.** support/distribution center in Coppell, TX, and a **600,000 sq. ft.** distribution center in Aberdeen, MD[213](index=213&type=chunk) - Elfa owns its three manufacturing facilities, located in Västervik, Sweden; Mullsjö, Sweden; and Koszalin, Poland[214](index=214&type=chunk) [Legal Proceedings](index=66&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings not expected to have a material adverse effect on its financial condition - The company is involved in ordinary course legal proceedings, but management does not expect them to have a **material adverse effect**[215](index=215&type=chunk) [Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures - None[216](index=216&type=chunk) Part II [Market for Common Equity and Related Matters](index=70&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "TCS," and it does not currently expect to pay cash dividends - Common stock is traded on the NYSE under the symbol **"TCS"**[224](index=224&type=chunk) - The company **does not currently expect to pay cash dividends**[225](index=225&type=chunk) [[Reserved]](index=70&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=71&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 saw a 4.3% sales decline to $1.05 billion and a net loss of $158.9 million, driven by a $197.7 million goodwill impairment - A non-cash goodwill impairment charge of **$197.7 million** was the primary driver of the significant net loss in fiscal 2022[268](index=268&type=chunk) - Free cash flow was **negative $4.9 million** in fiscal 2022, a significant decrease from the positive $23.6 million generated in fiscal 2021, primarily due to higher capital expenditures[305](index=305&type=chunk)[306](index=306&type=chunk) Fiscal 2022 vs. Fiscal 2021 Performance | Metric | Fiscal 2022 | Fiscal 2021 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,047.3M | $1,094.1M | (4.3)% | | Comparable Store Sales | (3.7)% | N/A | N/A | | Gross Margin | 57.4% | 58.2% | (80 bps) | | Net (Loss) Income | ($158.9M) | $81.7M | (294.4)% | | Adjusted EBITDA | $115.4M | $159.0M | (27.4)% | | Adjusted Net Income | $37.2M | $82.9M | (55.1)% | [Results of Operations (Fiscal 2022 vs. 2021)](index=79&type=section&id=Results%20of%20Operations) Fiscal 2022 net sales fell 4.3% due to lower comparable sales, while a $197.7 million goodwill charge drove an operating loss - Consolidated SG&A expenses increased as a percentage of net sales by **330 basis points to 46.4%**, primarily due to deleverage on lower sales[267](index=267&type=chunk) - The company recorded a non-cash goodwill impairment charge of **$197.7 million** in fiscal 2022, with no such charge in fiscal 2021[268](index=268&type=chunk) Net Sales Breakdown (FY2022 vs FY2021) | Component | Change in Net Sales (in thousands) | | :--- | :--- | | **FY2021 Net Sales** | **$1,094,119** | | Comparable Store Sales Decrease | ($38,707) | | Non-Comparable Sales Increase | $6,893 | | Elfa Third-Party Sales Decrease (ex-FX) | ($5,026) | | Foreign Currency Translation Impact | ($10,021) | | **FY2022 Net Sales** | **$1,047,258** | Gross Margin by Segment | Segment | FY2022 Gross Margin | FY2021 Gross Margin | Basis Point Change | | :--- | :--- | :--- | :--- | | TCS | 57.1% | 57.6% | (50) bps | | Elfa | 32.7% | 31.9% | +80 bps | | **Consolidated** | **57.4%** | **58.2%** | **(80) bps** | [Liquidity and Capital Resources](index=89&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash from operations and credit facilities, ending fiscal 2022 with $167.9 million in total debt - As of April 1, 2023, the company had total outstanding debt of **$167.9 million** and an additional **$100.0 million of availability** under its revolving credit facilities[153](index=153&type=chunk)[286](index=286&type=chunk) - The company expects total capital expenditures for fiscal 2023 to be in the range of **$45 million to $50 million**[287](index=287&type=chunk) - A **$30 million share repurchase program** was authorized in August 2022; as of April 1, 2023, the company had repurchased $5 million worth of common stock[291](index=291&type=chunk)[503](index=503&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Fiscal 2022 | Fiscal 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $59,305 | $56,990 | | Net cash used in investing activities | ($64,411) | ($50,422) | | Net cash used in financing activities | ($1,669) | ($9,381) | | **Free Cash Flow (Non-GAAP)** | **($4,918)** | **$23,601** | [Critical Accounting Estimates](index=99&type=section&id=Critical%20Accounting%20Estimates) Key estimates include inventory valuation, lease accounting, and intangible asset valuation, with goodwill impairment being a major factor in fiscal 2022 - **Inventories:** Estimates for obsolescence and shrinkage reserves are critical, based on historical trends and future sales price estimates[326](index=326&type=chunk)[327](index=327&type=chunk) - **Leases:** Key judgments include determining the incremental borrowing rate to present value lease payments and assessing lease renewal options[335](index=335&type=chunk) - **Goodwill and Intangibles:** The company tests goodwill for impairment annually; this process resulted in a total non-cash goodwill impairment charge of **$197.7 million** for the TCS segment in fiscal 2022[337](index=337&type=chunk)[340](index=340&type=chunk)[428](index=428&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=109&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable - Not applicable[357](index=357&type=chunk) [Financial Statements and Supplementary Data](index=110&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited financial statements received an unqualified opinion, with critical audit matters related to goodwill and lease valuations - The independent auditor, Ernst & Young LLP, issued an **unqualified opinion** on the financial statements and internal controls[360](index=360&type=chunk)[361](index=361&type=chunk) - **Critical Audit Matters** identified were the valuation of goodwill (due to a material impairment) and the valuation of operating lease assets and liabilities[365](index=365&type=chunk)[371](index=371&type=chunk) Consolidated Balance Sheet Summary (in thousands) | Account | April 1, 2023 | April 2, 2022 | | :--- | :--- | :--- | | Total current assets | $230,226 | $260,411 | | Total noncurrent assets | $754,948 | $937,166 | | **Total assets** | **$985,174** | **$1,197,577** | | Total current liabilities | $190,315 | $235,515 | | Total noncurrent liabilities | $532,674 | $533,966 | | **Total liabilities** | **$722,989** | **$769,481** | | **Total shareholders' equity** | **$262,185** | **$428,096** | Consolidated Statement of Operations Summary (in thousands) | Account | Fiscal Year 2022 | Fiscal Year 2021 | | :--- | :--- | :--- | | Net sales | $1,047,258 | $1,094,119 | | Gross profit | $600,963 | $636,237 | | (Loss) income from operations | ($127,595) | $125,454 | | **Net (loss) income** | **($158,856)** | **$81,718** | [Changes in and Disagreements With Accountants](index=173&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) There were no changes in or disagreements with accountants on accounting and financial disclosure - None[546](index=546&type=chunk) [Controls and Procedures](index=173&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective - Management concluded that **disclosure controls and procedures were effective** as of April 1, 2023[548](index=548&type=chunk) - Management concluded that **internal control over financial reporting was effective** as of April 1, 2023, based on the COSO framework (2013)[551](index=551&type=chunk) - The independent registered public accounting firm issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting[553](index=553&type=chunk) [Other Information](index=175&type=section&id=Item%209B.%20Other%20Information) There is no other information to report - None[561](index=561&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=175&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable - Not applicable[562](index=562&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=175&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the company's 2023 Proxy Statement - The required information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[564](index=564&type=chunk) [Executive Compensation](index=175&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the company's 2023 Proxy Statement - The required information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[565](index=565&type=chunk) [Security Ownership and Related Stockholder Matters](index=175&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the company's 2023 Proxy Statement - The required information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[566](index=566&type=chunk) [Certain Relationships, Related Transactions, and Director Independence](index=175&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information is incorporated by reference from the company's 2023 Proxy Statement - The required information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[567](index=567&type=chunk) [Principal Accounting Fees and Services](index=175&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information is incorporated by reference from the company's 2023 Proxy Statement - The required information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[568](index=568&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=177&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the report, omitting inapplicable schedules - The consolidated financial statements are included in Part II, Item 8 of this report[569](index=569&type=chunk) - All financial statement schedules have been omitted because they are not applicable or the information is included elsewhere[570](index=570&type=chunk) [Form 10-K Summary](index=185&type=section&id=Item%2016.%20Form%2010-K%20Summary) There is no Form 10-K summary provided - None[579](index=579&type=chunk)

The Container Store Group, Inc. (NYSE:TCS) Q4 2022 Earnings Conference Call May 16, 2023 4:30 PM ET Company Participants Caitlin Churchill - Investor Relations, ICR Satish Malhotra - President and Chief Executive Officer Jeff Miller - Chief Financial Officer Conference Call Participants Anders Myhre - Guggenheim Partners Ryan Meyers - Lake Street Capital Markets Kate McShane - Goldman Sachs Christopher Horvers - JPMorgan Operator Greetings and welcome to The Container Store Fourth Quarter 2022 Earnings Call ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36161 THE CONTAINER STORE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 26-0 ...

The Container Store Group, Inc. (NYSE:TCS) Q3 2022 Earnings Conference Call February 7, 2023 4:30 PM ET Company Participants Caitlin Churchill - Investor Relations, ICR, Inc. Satish Malhotra - President and Chief Executive Officer Jeff Miller - Chief Financial Officer Conference Call Participants Steven Forbes - Guggenheim Partners Ryan Meyers - Lake Street Capital Markets, LLC Christopher Horvers - JPMorgan Chase & Co. Operator Greetings, and welcome to The Container Store Third Quarter 2022 Earnings Confe ...