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 October 1, 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 26-056 ...

| --- | --- | --- | --- | --- | |------------------|-------|-------|-------|-------| | | | | | | | | | | | | | Q2FY22 Earnings | | | | | | NYSE: TCS | | | | | | November 1, 2022 | | | | | Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including statements re ...

Financial Data and Key Metrics Changes - Consolidated net sales declined by 1.2% year-over-year to $272.7 million, with adjusted earnings per diluted share at $0.27 compared to $0.54 in the prior year [10][44] - Consolidated gross margin decreased to 56.6% from 59.3% last year, primarily due to commodity and freight increases [40] - Net income on a GAAP basis was $15.7 million or $0.31 per diluted share, down from $27.2 million or $0.54 per diluted share in the previous year [44] Business Line Data and Key Metrics Changes - Retail business net sales were $259.9 million, a 0.2% increase year-over-year, with a comparable store sales decrease of 0.8% driven by a 4.6% decline in general merchandise categories [36] - Customer space sales increased by 7.1% compared to fiscal 2021, contributing 230 basis points to comparable store sales [36] - Online channel sales decreased by 0.7% year-over-year, but including curbside pickup, website sales increased by 5.4% [38] Market Data and Key Metrics Changes - Comp store sales performance was up 7% compared to last year, partially offsetting the decline in general merchandise [23] - Average daily sales for the back-to-college event doubled compared to last year, with an average ticket 33% higher [17] - The loyalty program saw over 126,000 customers tier up in Q2, with loyalty members having a 61% higher average ticket than non-loyalty members [18] Company Strategy and Development Direction - The company remains committed to its strategic initiatives to support long-term growth and a $2 billion revenue goal, despite macroeconomic headwinds [13] - Focus on expanding reach and strengthening capabilities, including the introduction of new product lines and in-home installation services [28][34] - Plans to open 76 stores by the end of fiscal '27, with a third of these expected to open by the end of fiscal 2024 [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment with changing discretionary spending patterns due to inflation and rising interest rates [9][59] - The company expects continued macro headwinds in Q3, leading to a comparable store sales decline of high single digits [49] - Confidence in long-term growth remains, with a strong balance sheet and focus on operational discipline [55] Other Important Information - Capital expenditures for fiscal 2022 are projected to be in the range of $60 million to $65 million, representing 5.5% to 6.5% of total sales [66] - Free cash flow in the first half of the year was a use of $5.3 million, compared to $7.9 million generated in the same period last year [47] - The company repurchased approximately 940,000 shares for $5 million under a stock repurchase program [47] Q&A Session Summary Question: Commentary on customer engagement with the Preston line - Management noted that customers are changing their discretionary spending patterns, spending more on fewer items, but engagement with the Preston line has been strong, with average space values over $6,000 [59][61] Question: Update on capital expenditures - Capital expenditures for fiscal 2022 are still projected to be in the $60 million to $65 million range, with a focus on strategic objectives to reach the $2 billion revenue goal [66][68] Question: Insights on elevated ticket prices - Average ticket prices have increased due to higher pricing and promotional activity, but customers are purchasing fewer items overall [71][72] Question: Strengths in product categories - Strength was noted in the kitchen area, particularly with private label products, as new customers often start their journey in the kitchen department [74] Question: Changes in consumer cadence over the quarter - Significant traffic declines were observed starting in early August, but traffic has moderated since then [76][77] Question: SG&A performance and future expectations - SG&A performance in Q2 is expected to be a baseline for Q3, but could fluctuate based on seasonal trends [81]

| --- | --- | --- | --- | --- | |------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | Q1FY22 Earnings | | | | | | NYSE: TCS | | | | | | August 2, 2022 | | | | | Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including sta ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents unaudited consolidated financial statements for Q1 FY2022, showing increased net sales, decreased net income, and total assets reaching $1.22 billion [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) Presents unaudited consolidated financial statements for Q1 FY2022, including balance sheets, operations, comprehensive income, cash flows, and shareholders' equity Consolidated Statement of Operations Highlights (Thirteen Weeks Ended) | Metric | July 2, 2022 (in thousands) | July 3, 2021 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $262,634 | $245,315 | +7.1% | | Gross Profit | $150,088 | $146,324 | +2.6% | | Income from Operations | $17,935 | $26,517 | -32.4% | | Net Income | $10,479 | $17,672 | -40.7% | | Diluted EPS | $0.21 | $0.35 | -40.0% | Consolidated Balance Sheet Highlights (in thousands) | Metric | July 2, 2022 (in thousands) | July 3, 2021 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $269,670 | $215,243 | | Total Assets | $1,224,439 | $1,084,526 | | Total Current Liabilities | $229,345 | $209,906 | | Total Liabilities | $790,832 | $714,978 | | Total Shareholders' Equity | $433,607 | $369,548 | Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | Thirteen Weeks Ended July 2, 2022 (in thousands) | Thirteen Weeks Ended July 3, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,172 | $3,737 | | Net cash used in investing activities | ($18,327) | ($7,561) | | Net cash provided by (used in) financing activities | $24,404 | ($3,571) | | Net increase (decrease) in cash | $8,954 | ($7,175) | [Notes to the Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20unaudited%20consolidated%20financial%20statements) Details accounting policies, segment performance, the $21.4 million Closet Works acquisition, and a new $30 million share repurchase program - The company operates two reportable segments: The Container Store (TCS) for retail and online sales, and Elfa, a Swedish shelving systems manufacturer[21](index=21&type=chunk)[25](index=25&type=chunk) - On December 30, 2021, Closet Works was acquired for **$21.4 million** in cash, adding **$18.3 million** in goodwill to the TCS segment[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) - A new stock repurchase program was approved on August 1, 2022, authorizing the purchase of up to **$30 million** of common stock[73](index=73&type=chunk) Segment Performance (Thirteen Weeks Ended July 2, 2022, in thousands) | Segment | Net Sales to Third Parties (in thousands) | Adjusted EBITDA (in thousands) | | :--- | :--- | :--- | | TCS | $246,771 | $25,097 | | Elfa | $15,863 | $3,251 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Item%202.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management discusses Q1 FY2022 results, noting increased net sales, gross margin decline, higher SG&A, and details on liquidity and capital expenditures - Net sales for Q1 FY22 increased **7.1% to $262.6 million**, driven by a **5.1% increase in comparable store sales**, with Custom Closets sales growing **14.7%**[102](index=102&type=chunk) - Consolidated gross margin decreased by **250 basis points to 57.1%**, primarily due to a **140 basis point decline** in the TCS segment's gross margin from increased freight costs[103](index=103&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **10.7% year-over-year**, rising to **46.4% of net sales** from 44.9%, driven by higher compensation, benefits, and marketing costs[105](index=105&type=chunk) - Total capital expenditures for fiscal 2022 are expected to be between **$60 million and $65 million**, allocated towards technology, store updates, Elfa, and new store openings[110](index=110&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Details Q1 FY2022 operational results, showing increased TCS net sales, decreased Elfa third-party sales, and a gross margin contraction Net Sales Breakdown (Thirteen Weeks Ended, in thousands) | Segment | July 2, 2022 (in thousands) | July 3, 2021 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | TCS Net Sales | $246,771 | $228,729 | +7.9% | | Elfa Third-Party Net Sales | $15,863 | $16,586 | -4.4% | | **Total Net Sales** | **$262,634** | **$245,315** | **+7.1%** | - Comparable store sales increased by **5.1%**, with Custom Closets up **14.7%** and general merchandise categories up **0.8%**[102](index=102&type=chunk) - Adjusted EBITDA decreased to **$28.2 million** for the quarter compared to **$33.5 million** in the prior-year period[91](index=91&type=chunk)[96](index=96&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses liquidity, cash on hand, available credit, negative free cash flow from increased capital expenditures, and outstanding debt Cash Flow and Liquidity Summary (in thousands) | Metric | Thirteen Weeks Ended July 2, 2022 (in thousands) | | :--- | :--- | | Cash at end of period | $23,206 | | Net cash provided by operating activities | $3,172 | | Additions to property and equipment | ($17,620) | | Free Cash Flow (Non-GAAP) | ($14,448) | - Capital expenditures totaled **$17.6 million**, with **$12.2 million** invested in technology, a significant increase from **$7.6 million** in the prior-year quarter[120](index=120&type=chunk)[121](index=121&type=chunk) - As of July 2, 2022, **$160.4 million** was outstanding under the Senior Secured Term Loan Facility and **$15.0 million** under the Revolving Credit Facility[125](index=125&type=chunk)[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) Outlines market risks from foreign currency, interest rate volatility on variable-rate debt, and inflationary pressures, with mitigation strategies - The company hedges **100%** of Elfa's inventory purchases in Swedish krona using forward contracts to mitigate foreign currency risk[151](index=151&type=chunk)[152](index=152&type=chunk) - The company faces interest rate risk on **$193.5 million** of variable-rate borrowings as of July 2, 2022[153](index=153&type=chunk) - Inflationary pressures on commodity and freight prices are being mitigated through vendor negotiations, supply chain management, and pricing adjustments[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded disclosure controls and procedures were effective as of July 2, 2022, with no material changes to internal control over financial reporting - Disclosure controls and procedures were deemed **effective** by management, including the CEO and CFO, as of July 2, 2022[156](index=156&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter[157](index=157&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) Covers legal proceedings, risk factors, and equity sales, noting no material adverse effects or changes to previously disclosed risk factors [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20proceedings) The company is involved in ordinary legal proceedings, with no expected material adverse effect on financial condition or results of operations - Various legal proceedings and claims arising in the ordinary course of business are not expected to have a **material adverse effect** on the company[158](index=158&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20factors) No material changes to the company's risk factors were reported from those disclosed in the 2021 Annual Report on Form 10-K - No material changes to previously disclosed risk factors from the 2021 Annual Report on Form 10-K were reported[159](index=159&type=chunk)

The Container Store Group, Inc. (NYSE:TCS) Q1 2022 Earnings Conference Call August 2, 2022 4:30 PM ET Company Participants Caitlin Churchill - Investor Relations, ICR Satish Malhotra - Chief Executive Officer Jeff Miller - Chief Financial Officer Conference Call Participants Steve Forbes - Guggenheim Securities Kate McShane - Goldman Sachs Ryan Meyers - Lake Street Capital Markets Chris Horvers - JPMorgan Operator Greetings and welcome to The Container Store’s First Quarter 2022 Earnings Call. At this time, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 2, 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 | 26-0565401 | ...

ש The Container Store® Q4 and Full Year FY21 Earnings NYSE: TCS May 17, 2022 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our future opportunities and expectations for our business; our goals, strategies, priorities and initi ...

The Container Store Group, Inc. (NYSE:TCS) Q4 2021 Earnings Conference Call May 17, 2022 4:30 PM ET Company Participants Caitlin Churchill - Investor Relations, ICR, Inc. Satish Malhotra - Chief Executive Officer Jeff Miller - Chief Financial Officer Conference Call Participants Ryan Meyers - Lake Street Capital Markets Katharine McShane - Goldman Sachs Christopher Horvers - JPMorgan Operator Greetings, and welcome to The Container Store Fourth Quarter 2021 Earnings Conference Call. At this time, all parti ...

Q3FY21 Earnings NYSE: TCS February 8, 2022 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our future opportunities and expectations for our business; our goals, strategies, priorities and initiatives; market opportunities; sale ...