Container Store Group sales up 1.4%
Net sales in The Container Store retail business were $168.5 million, up 2.9% as compared to the third quarter of fiscal 2013, primarily due to new store sales. This more than offset the comparable store sales operating measure decline of 3.5%.
Elfa's third party net sales increased by 1.9% in Swedish krona; however, due to the depreciation of the Swedish krona against the U.S. dollar, Elfa's third party net sales decreased by 8.6% in U.S. dollars. The translation of Elfa's net sales from Swedish krona into U.S. dollars negatively impacted Elfa's third party net sales by approximately $2.6 million in the third quarter of fiscal 2014.
Gross margin was 59.6%, a decrease of 40 basis points compared to the third quarter of fiscal 2013, primarily due to a decrease in Elfa segment gross margin, which was due to a shift in sales mix.
Selling, general and administrative expenses (“SG&A”) were $93.8 million, compared to $88.8 million in the third quarter of fiscal 2013. SG&A as a percentage of net sales increased 200 basis points primarily due to decreased leverage of fixed costs during the quarter as a result of lower comparable store sales, increased costs as a result of being a public company, and implementation of strategic initiatives.
The Company ended the third quarter with 69 stores in 25 states and the District of Columbia. The Company opened two new stores in each of the third quarters of fiscal 2014 and fiscal 2013. Net interest expense decreased to $4.3 million from $5.8 million in the third quarter of fiscal 2013.
The effective tax rate for the third quarter of fiscal 2014 was 34.2%, as compared to (39.9%) in the third quarter of fiscal 2013. ■