Company profile

Ticker
TCS
Exchange
CEO
Melissa Meyer Reiff
Employees
Location
Fiscal year end
Former names
TCS Holdings
SEC CIK
IRS number
260565401

TCS stock data

(
)

Calendar

30 May 19
22 Jul 19
30 Mar 20

News

Company financial data Financial data

Quarter (USD) Mar 19 Dec 18 Sep 18 Jun 18
Revenue 253.18M 221.64M 224.45M 195.82M
Net income 15.88M 9.32M 3.24M -6.76M
Diluted EPS 0.33 0.19 0.07 -0.14
Net profit margin 6.27% 4.21% 1.44% -3.45%
Operating income 28.13M 11.4M 14.12M -2.34M
Net change in cash -13.61M 13.76M -6.89M 5.7M
Cash on hand 7.36M 20.97M 7.21M 14.1M
Annual (USD) Mar 19 Feb 16 Feb 15 Mar 14
Revenue 895.09M 794.63M 781.87M 748.54M
Net income 21.68M 5.14M 22.67M 8.17M
Diluted EPS 0.45 0.11 0.47 -2.87
Net profit margin 2.42% 0.65% 2.90% 1.09%
Operating income 51.32M 24.86M 46.97M 31.03M
Cash on hand 7.36M

Financial data from company earnings reports

Financial report summary

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Risks
  • An overall decline in the health of the economy and consumer spending may affect consumer purchases of discretionary items, which could reduce demand for our products and materially harm our sales, profitability and financial condition.
  • Competition, including internet‑based competition, could negatively impact our business, adversely affecting our ability to generate higher net sales.
  • If our operating and financial performance in any given period does not meet the guidance that we provide to the public, our stock price may decline.
  • We are undertaking a number of significant business initiatives at the same time and if these initiatives are not successful, they may have a negative impact on our operating results.
  • If we are unable to source and market new products to meet our high standards and customer preferences or are unable to offer our customers an aesthetically pleasing and convenient shopping environment, our results of operations may be adversely affected.
  • We face risks related to our indebtedness.
  • If we are unable to effectively manage our online sales, our reputation and operating results may be harmed.
  • We currently depend on a single distribution center for all of our stores.
  • We face risks related to opening a second distribution center.
  • We are subject to risks associated with our dependence on foreign imports for our merchandise.
  • We rely upon independent third‑party transportation providers for substantially all of our product shipments and are subject to increased shipping costs as well as the potential inability of our third‑party transportation providers to deliver on a timely basis.
  • Material damage to, or interruptions in, our information systems as a result of external factors, staffing shortages and difficulties in updating our existing software or developing or implementing new software could have a material adverse effect on our business or results of operations.
  • Our business requires that we lease substantial amounts of space and there can be no assurance that we will be able to continue to lease space on terms as favorable as the leases negotiated in the past.
  • If we fail to successfully anticipate consumer preferences and demand, or to manage inventory commensurate with demand, our results of operations may be adversely affected.
  • Our facilities and systems, as well as those of our vendors, are vulnerable to natural disasters and other unexpected events, and as a result we may lose merchandise and be unable to effectively deliver it to our stores and online customers.
  • We rely upon third-party web service providers to operate certain aspects of our business operations and any disruption of or interference with such operations would materially and adversely impact our business.
  • Our costs and financial results may change as a result of currency exchange rate fluctuations.
  • Our costs may increase due to factors that may or may not be controllable by us, which may negatively affect our financial results.
  • Costs and risks relating to new store openings could severely limit our growth opportunities.
  • Our business depends in part on a strong brand image. If we are not able to protect our brand, we may be unable to attract a sufficient number of customers or sell sufficient quantities of our products.
  • Expansion increases the complexity of our business and we may not be able to effectively manage our growth, which may cause our brand image and financial performance to suffer.
  • We will require significant capital to fund our expanding business, which may not be available to us on satisfactory terms or at all. We plan to use cash from operations to fund our operations and execute our growth strategy. If we are unable to maintain sufficient levels of cash flow, we may not meet our growth expectations or we may require additional financing which could adversely affect our financial health and impose covenants that limit our business activities.
  • Disruptions in the global financial markets may make it difficult for us to borrow a sufficient amount of capital to finance the carrying costs of inventory and to pay for capital expenditures and operating costs, which could negatively affect our business.
  • Our ability to obtain merchandise on a timely basis at competitive prices could suffer as a result of any deterioration or change in our vendor relationships or events that adversely affect our vendors or their ability to obtain financing for their operations.
  • There is a risk that our vendors may sell similar or identical products to our competitors, which could harm our business.
  • We depend on key executive management.
  • If we are unable to find, train and retain key personnel, including new employees that reflect our brand image and embody our culture, we may not be able to grow or sustain our operations.
  • Labor activities could cause labor relations difficulties for us.
  • Because of our international operations, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti‑bribery and anti‑kickback laws.
  • Our fixed lease obligations could adversely affect our financial performance.
  • There are claims made against us from time to time that may result in litigation that could distract management from our business activities and result in significant liability or damage to our brand.
  • Product recalls and/or product liability, as well as changes in product safety and other consumer protection laws, may adversely impact our operations, merchandise offerings, reputation, results of operations, cash flow and financial condition.
  • Changes in statutory, regulatory, accounting, and other legal requirements could potentially impact our operating and financial results.
  • Our total assets include intangible assets with an indefinite life, goodwill and trademarks, and substantial amounts of property and equipment. Changes in estimates or projections used to assess the fair value of these assets, or operating results that are lower than our current estimates at certain store locations, may cause us to incur impairment charges that could adversely affect our results of operation.
  • Fluctuations in our tax obligations and effective tax rate and realization of our deferred tax assets, including net operating loss carryforwards, may result in volatility of our operating results.
  • Recently enacted changes to U.S. tax laws may have a material impact on our business in the future.
  • Our operating results are subject to quarterly and seasonal fluctuations, and results for any quarter may not necessarily be indicative of the results that may be achieved for the full fiscal year.
  • Material disruptions at one of our Elfa manufacturing facilities could negatively affect our business.
  • Our failure or inability to protect our intellectual property rights could diminish the value of our brand and weaken our competitive position.
  • If third parties claim that we infringe upon their intellectual property rights, our operating results could be adversely affected.
  • Our common stock price may be volatile or may decline.
  • We are controlled by investment funds managed by Leonard Green and Partners, L.P. (“LGP”), whose interests in our business may be different from yours.
  • We are a “controlled company” within the meaning of the New York Stock Exchange listing requirements and as a result, qualify for and intend to rely on exemptions from certain corporate governance requirements. You do not have the same protection afforded to shareholders of companies that are subject to such corporate governance requirements.
  • Substantial future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
  • Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes‑Oxley Act could have a material adverse effect on our business and stock price.
  • We do not currently expect to pay any cash dividends.
  • We incur costs as a public company and our management is required to devote substantial time to compliance matters.
  • Our anti‑takeover provisions could prevent or delay a change in control of our Company, even if such change in control would be beneficial to our shareholders.
  • The provision of our certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
Management Discussion
  • Net sales in fiscal 2018 increased by $37,865, or 4.4%, compared to fiscal 2017. This increase is comprised of the following components:
  • During fiscal 2018, comparable stores generated $26,751, or 350 basis points, of the 4.4% increase in net sales. Additionally, six new stores generated $15,058 of incremental net sales, four of which were opened during fiscal 2017 and two of which were opened in fiscal 2018. Elfa third party net sales decreased $4,382 during fiscal 2018, primarily due to the negative impact of foreign currency translation, which decreased third party net sales by $4,832. After converting Elfa’s third party net sales from Swedish krona to U.S. dollars using the prior year’s conversion rate for fiscal 2018 and fiscal 2017, Elfa third party net sales increased $450 primarily due to higher sales in the Nordic markets.
  • TCS gross margin increased 80 basis points during fiscal 2018, primarily due to lower cost of goods sold associated with the Optimization Plan, partially offset by higher promotional activities and increased costs associated with shipping services. Elfa segment gross margin decreased 320 basis points, primarily due to higher direct materials costs attributable to higher raw material prices, a shift in product mix, and a weaker Swedish krona. On a consolidated basis, gross margin increased 50 basis points, due to the increase in TCS gross margin in fiscal 2018.
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