The Container Store Group Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 6, 2024

There are 9 speakers on the call.

Operator

Greetings, and welcome to The Container Store Third 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 presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Caitlin Churchill, Investor Relations.

Operator

Thank you, Caitlin. You may begin.

Speaker 1

Good afternoon, everyone, and thanks for joining us today for The Container Store's Q3 fiscal year 2023 Earnings Results Conference Call. Speaking today are Satish Malhotra, Chief Executive Officer and Jeff Miller, Chief Financial Officer. After Satish and Jeff have made their formal remarks, we will open the call to questions. Before we begin, I would like to remind everyone that certain matters discussed In today's conference call are forward looking statements relating to future events, management's plans and objectives for the business and the future financial performance of the company that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward looking statements.

Speaker 1

The risk factors that may affect results are referred to in The Container Store's press release issued today and in our annual report on Form 10 ks filed with the SEC on May 26, 2023, as updated by our quarterly reports on Form 10Q and other public filings with the U. S. Securities and Exchange Commission. The forward looking statements made today are as of the date of this The call in The Container Store does not undertake any obligation to update the forward looking statements. Finally, the speakers may refer to certain adjusted or non GAAP financial measures on this call.

Speaker 1

A reconciliation schedule of the non GAAP financial measures to the most directly comparable GAAP measures is also available in The Container Store's press release issued today. A copy of today's press release and investor deck may be obtained by visiting the Investor Relations page of the website atwww.containerstore.com. I will now turn the call over to Satish. Satish?

Speaker 2

Thank you, Caitlin, and thank you all for joining our call today. I'll begin today's discussion by reviewing highlights from our 3rd quarter performance, followed by a review of our key areas of growth. Jeff will then share the details of our Q3 financial results, followed by our outlook. We'll then open up the call to questions. As we discussed in our announcement last month, our 3rd quarter sales results fell short of our original expectation.

Speaker 2

We delivered a year over year consolidated sales decline of 14.8%, largely driven by ongoing challenges in our core general merchandise categories. Despite these dynamics, we maintained a strong discipline with respect to our promotional strategy and expense management to deliver adjusted loss per share of $0.08 which was within our original range of expectation. Furthermore, we were encouraged by the sequential improvement in year over year comparable sales decline of custom spaces over the 2nd quarter. While the current macroeconomic environment still remains challenging, our teams are focused on executing against our strategic initiatives, leaning into the areas of the business that are delivering results and positioning ourselves to maximize the potential for longer term growth, particularly with custom spaces. For the Q3, despite experiencing declines in our core general merchandise category, We did see a positive reception to the introduction of new products to our assortment, with sales more than doubling against our expectations for these new products.

Speaker 2

In particular, our new premium products continue to do very well. Our analysis has shown that customers purchasing new premium products are returning more frequently and have a higher average ticket compared to customers who do not purchase PC products. Additionally, our Discovery categories are also performing strongly with On the Go Travel Solutions and Home Fragrances achieving double digit growth in comparable sales relative to the Q3 of last year. Likewise, our premium custom spaces have also maintained robust performance with sales experiencing only a slight decline compared to last year, thus outpacing the overall performance of company's faces. Instead that, we were pleased with the performance of our value oriented Alpha Lab, which celebrated its 75th anniversary with a special event that ended in the Q3.

Speaker 2

The event sale performance met our expectations with notable sales being achieved towards the end of the event as customers responded to the sense of urgency messaging that was conveyed in our marketing communication. Looking ahead to Q4, in addition to January's abnormal weather impact, we anticipate continued challenges to our core general merchandise category, similar to what we experienced in the prior quarters. As a reminder, Custom Spaces is expected to have a tougher Sequential comparison, as mentioned on our prior call, due to the additional promotional event this year to celebrate Elfa's 75th anniversary. We also expect softer alpha product related sales during the planned non promotional time period in the Q4. In response to our top line performance, we remain committed to exercising strong discipline with both our promotional strategy and expense management.

Speaker 2

Furthermore, we look to action additional areas of optimization and increased efficiency. As we look forward to fiscal 2024, We believe the need for the container store has never been greater. Over half of Americans are overwhelmed by the dramatic party they have And the vast majority have no idea what to do about it. Many resort to renting outside storage or find themselves unable to use the garages for parking due to the poor utilization of space in their home. They need our help to reclaim not only their space, but their time, their money and their lives.

Speaker 2

That's the journey we've been on these past few years and the purpose we have been living out, to help our customers transform their lives through a powerful organization. While we are uniquely positioned with our comprehensive solution and services, we recognize the need to increase awareness about what we offer. This includes leveraging accolades such as the recent Recognition by Time, which named Alpha and Preston as top picks within several of their best closet system categories. Turning to the key growth areas of custom spaces and general will be focused on in fiscal 2024. While talking spaces has traditionally accounted for approximately 40% of our sales, Given pilot sales trends and identified opportunities, we believe we can grow this penetration to approximately 60% of sales over time.

Speaker 2

We aim to fuel Customer Spaces growth in 3 distinct ways. 1st, through our expanded assortment. As we have discussed before, we are continuing to drive innovation and units within our Tufts Spaces line. We have recently expanded our garage offering with Garage Bus by Alpha, which SaaS launched in late November. We're seeing the new features and functionality like enclosed wall and rolling cabinet, lighting, full extension rolls And Heavy Duty Workbench already resonates incredibly well with our customers and look forward to officially launching it this spring.

Speaker 2

Later this calendar year, we also plan to launch a significant overhaul of our Elfa Decor line that will elevate its positioning in the marketplace. Our Preston line is also expected to grow in its offering just as we had done earlier this fiscal year with more premium options like leather draw front, matte finishing and enhanced lighting. We're excited to be working on adding a fully concealed hardware option for customers, which we expect to be a material differentiator in the marketplace. Secondly, trying to grow our customer space business through our specialists, Whether they be in store designers supporting Alpha or in home designers supporting our more premium line. Today, we have almost 140 highly trained in home designers focused on selling premium spaces and they continue to perfect their selling strategy, speed of design and their design capability.

Speaker 2

In the Q3, 90 2 percent of premium space sales were driven by our in home designers. We plan to increase our number of in home designers and are working diligently to significantly improve our press in design to sold conversion rate, which is currently about 2 thirds of what we experienced with our premium Avera line. When combined with the total vegetable market opportunity, this provides us a long runway of growth and potential share gains within Custom Spaces. Finally, we anticipate customer spaces growth to come from increased awareness. Many customers today are rather not aware that we offer custom spaces or have yet to engage in this category.

Speaker 2

We aim to change that by being far more intentional and leveraging data to drive our marketing strategy. For example, through recent analysis, we reaffirmed The majority of customers who have purchased Preston and Elfa Spaces heavily shopped our kitchen and closet general merchandise categories first. Leveraging insights like these will help us make more impactful decisions as we attract new customers and launch them on their customer space journey. Furthermore, our marketing assets will aim to take a more integrated approach, demonstrating our ability to facilitate life changing transformations through space optimization, curated finishing products and vital organizational advice. Are maintained over time.

Speaker 2

As we intensify our focus on customer spaces, our merchandising team is hyper focused and refining and rebuilding our general merchandise assortment to complement our customer spaces offering for a complete solution. With respect to general merchandise growth, we also plan for it to come from 3 distinct areas. 1st, through our expanded premium assortment. As we shared, we are pleased with the reception of our new premium general merchandise and see an opportunity to grow this pathway with an improved margin profile. This includes high quality artisan bins and baskets to accompany a pressing closet and glass crystal glass and barware to complete a pressing pantry.

Speaker 2

Offering premium general merchandise to complete our premium custom statement essential to serve the needs of our customers and offers them a sole solution under one roof. Next, we plan to grow our exclusive private label business through our new sourcing capabilities that we brought in house last year. Our Growing Everything Organizer collection is a great example of an exclusive value oriented offering that can work in any space and complements Out of the solution, the healthy margins private label products provide and the opportunity to develop products that seamlessly integrate with our trusted spaces make this area crucial to our general merchandise growth. Currently 40% of our general merchandise assortment is private label and we see an opportunity to increase it further over time. Lastly, we believe we can achieve growth in general merchandise throughout discovery categories that complement our core offering.

Speaker 2

Discovery categories like home fragrances and On the Go Travel Solutions continue to trend positively, presenting us with significant opportunities in these areas. Before I close, I want to touch on our updated outlook for the remainder of the year and our disciplined focus on capital allocation. With respect to store openings, we're on track end fiscal 2023 with 5 new locations and recently celebrated our 1 hundredth store opening in Pinson, New Jersey. We continue to see high penetration in customer spaces and high customer satisfaction in our small format stores with an average Net Promoter Score of 81 in Q3. In the balance of fiscal 2024, we plan to open 4 new built to suit locations, which as a reminder require far less capital outlay.

Speaker 2

We also plan to relocate our San Francisco store in late June and have made the strategic decision to close our store in Los Angeles at Farmer's Market. We closely monitor the profitability of our stores and decided it was not in the company's best interest to renew the lease when it ends in August of 2024 due to a significant rent increase. Furthermore, given the current environment, we are not committing to the timing of future store growth beyond 2024. While we continue to see significant opportunities to expand our national presence, it will be done in conjunction with our goal of sustained positive free cash flow. Despite the current macroeconomic difficulty and the obstacles encountered within our core general merchandise categories, We remain optimistic about the growth opportunities we have identified.

Speaker 2

Our belief in the transformative power of organization coupled with the demand for it And our unique solution oriented offering fuels our confidence. Narrowing this focus with the passion and the strength of our team lays a solid foundation for engineering success. And now I'll turn the call over to Jeff. Jeff?

Speaker 3

Thank you, Satish, and good afternoon, everyone. As Satish reviewed, while we continue to face similar challenges to our top line that we experienced in the Q2, particularly within our core general merchandise categories, we were able to deliver earnings results in line with our original guidance range through disciplined promotional activity and tight expense management. For the Q3, consolidated net sales decreased 14.8% year over year to 214,900,000 By segment, net sales for The Container Store Retail Business were $202,500,000 a 15.4% decrease compared to $239,300,000 last year. The decrease is inclusive of a comp store sales decrease of 16.8%, driven primarily by the 20.4% decline in our general merchandise categories, which negatively impacted comp store sales by 13 80 basis points. Custom space comp store sales declined 9.2% compared to last year and negatively impacted comp store sales by 300 basis points.

Speaker 3

Sales from new stores benefited total TCS net sales by 130 basis points. For the Q3 of fiscal 2023, our online channel decreased 26.3% year over year And our website generated sales, which includes curbside pickup, decreased 15.6% compared to last year. Website generated sales represented a total of 21.8 percent of TCS net sales in Q3, which is consistent with Q3 last year. Unearned revenue decreased to $17,500,000 in Q3 this year versus $18,800,000 last year, which is reflective of the decline in overall sales. Alpha third party net sales of $12,400,000 decreased 4.2% compared to the Q3 of fiscal 2022.

Speaker 3

Excluding the impact of foreign currency translation, Alpha 3rd party net sales decreased 4.9% year over year, primarily due to a decline in sales in Nordic markets. From a profitability standpoint, our consolidated gross margin for Q3 increased 140 basis points to 58.3% compared to 56.9% last year. The 140 basis point increase in gross margin was primarily driven by higher mix of custom space sales this year. By segment, TCS gross margin increased 40 basis points compared to last year, primarily due to freight tailwinds, which were partially offset by product and service mix headwinds driven by general merchandise as well as the expected impact from the incremental promotional activity in Q3 of this year. Alpha gross margin decreased 170 basis points compared to last year, primarily due to unfavorable mix, partially offset by price increases to customers.

Speaker 3

Consolidated SG and A dollars decreased $9,700,000 or 8 percent to $111,800,000 compared to $121,500,000 in Q3 last year, which reflects the impact of cost management actions taken in the Q1. As a percentage of net sales, SG and A increased 3 80 basis points year over year to 52%. The increase is primarily due to deleverage of fixed costs associated with lower sales in the Q3 of fiscal 2023. Our net interest expense in the Q3 of fiscal 2023 increased to $5,200,000 compared to $4,400,000 last year. The year over year increase is primarily due to higher year over year interest rates on our term loan and to a lesser extent higher average borrowings on our revolver during Q3.

Speaker 3

The effective tax rate for the quarter was negative 34.5% compared to positive 33.8% in the Q3 last year. The decrease in the effective tax rate was primarily related to the impact of discrete items related to share based compensation on a pre tax loss in the Q3 of fiscal 2023 as compared to pre tax income in the Q3 of fiscal 2022. Net loss for the quarter on a GAAP basis was $6,400,000 or $0.13 per share as compared to a GAAP net income of $4,200,000 or $0.08 per diluted share in the Q3 of last year. Adjusted net loss was $4,100,000 or $0.08 per share as compared to last year's adjusted net income up $4,100,000 or $0.08 per diluted share. Our adjusted EBITDA decreased to $12,800,000 in the 3rd quarter this year, compared to $22,200,000 in Q3 last year.

Speaker 3

Turning to our balance sheet, We ended the quarter with $16,000,000 in cash, dollars 184,700,000 in total debt and total liquidity, including availability on our revolving credit facilities of $99,600,000 Our current leverage ratio is 2.8 times. We ended the quarter with consolidated inventory down 14.3% compared to the Q3 last year. The decline reflects a concerted effort to tightly manage inventory in the current environment and is primarily the result of lower freight costs and fewer inventory units year over year. At TCS, on a unit basis, on hand inventory was down approximately 15% year over year driven by general merchandise. Capital expenditures were $33,400,000 in the 1st 9 months fiscal 2023 versus $46,600,000 in the 1st 9 months of fiscal 2022, which reflects the planned pullback in capital spending fiscal 2023.

Speaker 3

We are continuing to prioritize investment in our stores and technology. Free cash flow in the 1st 9 months of this year was a use of $6,700,000 versus a use of $27,700,000 in the 1st 9 months of last year. Now for our outlook. As noted in our press release, We have updated our full year outlook to reflect our year to date results and updated outlook for the Q4. For the Q4 of fiscal 2023, we expect consolidated net sales to be approximately $200,000,000 to $205,000,000 driven primarily by a comparable store sales decline in the mid-20s.

Speaker 3

The expected decline in comparable store sales It's reflective of weather challenges we have experienced in January, as well as continued pullback in our core and value oriented general merchandise categories. As it relates to Custom Spaces, in addition to the already anticipated pull forward headwind related to the Q3 75th Elfa anniversary sale, We are expecting additional pressure from the Alpha product line primarily during a planned non promotional time period in the 4th quarter. We expect the consolidated revenue declines are also inclusive of continued Alpha third party headwinds, which we expect to be more than offset by new store sales. We expect adjusted net loss per share in the 4th quarter to be in the range of $0.12 to 0 point 0 $9 The implied year over year operating margin decline for the 4th quarter is expected to be driven by SG and A, depreciation and other fixed cost deleverage on lower sales. In addition, we expect gross margin to be relatively flat in comparison to the prior year as a result of the net impact of continued freight tailwinds and an unfavorable product mix from general merchandise.

Speaker 3

Interest expense for the 4th quarter is expected to be approximately $5,000,000 driven primarily by higher interest rates. The effective income tax rate for the 4th quarter is expected to be approximately 21%. Capital expenditures for the full fiscal 2023 are now expected to be in the range of approximately $40,000,000 to 45,000,000

Speaker 2

Based on our performance to date

Speaker 3

and our 4th quarter outlook, we're expecting free cash flow to be slightly negative in fiscal 2023. This concludes our prepared remarks. I'll now turn it over to the operator to begin the Q and A session.

Operator

Thank you. Our first question is from Stephen Forbes with Guggenheim Securities. Please proceed with your question.

Speaker 2

Good afternoon, Satish, Jeff. Satish,

Speaker 4

Given the focus on conversion, right, and awareness improvements here as we look out, can you maybe give us Some preliminary thoughts on how you're thinking about the event calendar for next year. And have you guys sort of identified why the conversion the design to conversion rates differ between the product lines? Like is there Any sort of targeted efforts, right, that you've sort of identified that you can incorporate into the event calendar?

Speaker 5

Yes. This is Satish. Thanks for the question, Steve. So firstly, when it comes to the event calendar, The thinking that we have for fiscal 2024 is to separate some of the lines that we have traditionally Showcase for our customers. So rather than having a combined custom space event with all of our lines, we look to kind of separate them So they can each have their moments in particular as we see really strong progression of in store sales with Elfa and then utilizing our in home specialists driving our Preston and Avera sales.

Speaker 5

With results and quite frankly, I would tell you the conversion rate for Elfa is extremely high as you can imagine because not only is it available for customers for a do it yourself option, but it also allows us to design for our customers and for them to really benefit from the modularity of the Alpha offering. When we think about the lines in particular, more premium lines. As you can imagine, and this is the efforts that we've been on, in particular with Avera is that It takes our specialists some time to get comfortable with the lines and with their selling approach and we've definitely seen great improvements with our Avera conversion lines. And similarly, we expect that to happen with our Preston line. As I mentioned, we have about 140 in home designers and they've gone through Rigorous design trainings to enhance their design and selling skills.

Speaker 5

Our more tenured designers are already performing quite well and annualizing sales anywhere between $700,000 to $800,000 and are making great progress on their design to sales conversion rates. And obviously that's slightly pulled down with new individuals that we're training and bringing into our company. So look, all I will tell you is that we've seen great success in conversion with Alpha. We've seen great success with Avera and we believe As our more tenured designers get comfortable with selling Preston, we should in fiscal 2024 to get the benefits of them now being accustomed with all the new features and functionalities that we bought with Preston including their abilities to utilize the design tools that are in their hands to start to benefit quite well with that conversion rate.

Speaker 4

Thank you for the color. Maybe just a quick follow-up for Jeff. You comment out this year sort of looking at slightly negative On free cash flow, any sort of preliminary thoughts as we think about the rebalancing of growth versus profit into next year? And So what levers that the business can pull, to maybe keep the business in sort of a free cash flow neutral to positive state?

Speaker 6

Sure, Steve. We're in the early stages of planning our fiscal 2024, so we can't necessarily comment too much in detail, but as we think about the business moving forward and maintaining and sustaining free cash flow as we're in this growth mode, focused on the growth mode, there are a number of levers that we have. And right now, we've actually In the call earlier, Satish spoke to the fact that we have 4 stores open plan to be open in 2024 and we have no plans for store expansion outside of 2024. So we're pulling back from a capital expenditure perspective. It certainly will help on a free cash flow perspective in fiscal 2024, I would expect that.

Speaker 6

As it relates to expense management and working capital, we see a line of working capital opportunities, specifically in inventory, one of our largest areas of working capital, and we'll be working towards that as we get into 2024 plans of actions around that. And of course, we're always looking for efficiencies on the expense side and we'll continue to focus in on that. As we work through our line of sight for fiscal 2024 with the aim in sight of positive to neutral free cash flow.

Speaker 3

Thank you.

Operator

Thank you. Our next question is from Kate McShane with Goldman Sachs. Please proceed with your question.

Speaker 7

Hi, thanks for taking our question. We wanted to ask about Marketing, obviously, with Steve's question, you just walked through the messaging and the event calendar. But is there any change happening with the percentage spent as a percentage of sales on marketing or are you shifting dollars in any way to improve this messaging?

Speaker 5

Yes, I'll take the first part of that question and then I'll let Jeff talk about the percentage to sales. Look, the change that we're making in our marketing is really to be more mindful of understanding that customers are still Not really aware that we offer custom spaces and the approach that we're taking is a far more integrated approach. And what I mean by that is our ability whether it's through emails or our site or even embedded within our general merchandise is really Allowing customers to understand the importance of making sure they have the right space and how that space can be optimized for them And then how our general merchandise truly is acting as a finishing product for that more optimized space, finished off with really some vital organizational tips to ensure that they're able to maintain their transformational achievements once they're being able to fully embrace what we have to offer. So that's what you should expect to see now and into fiscal 2024 is us taking more of this integrated approach rather than it being siloed out between a custom space messaging that then differs from a general merchandise messaging that then differs from a services offering.

Speaker 6

And just to add to that, Kate, in terms of dollars spent in marketing, as a percent of sales, we remained relatively consistent throughout fiscal 'twenty three. And as I said earlier, we're still early in the plans for 2024. But I think the focus will be more around making those dollars work harder for us as Satish was outlining The approaches and how we're doing it and the team that we have here at The Container Store has been working very diligently and finding ways to be much more efficient with the marketing dollars that we have to have the biggest impact. And I think Satish outlined some of those ways that we feel like would have the biggest impact. We've been focused on making sure we're operationally efficient from an SG and A perspective and implied in the Q4 guide is SG and A savings of $15,000,000 up to $15,000,000 which we started the fiscal year taking actions And we had a range in we saved $30,000,000 through Q3 with an additional 15 through Q4 for total potential savings of $45,000,000 on a year over year basis.

Speaker 6

With that in mind, we will continue to focus marketing as a key aspect of engaging with our customer and maintaining those messages and making sure they're much more efficient.

Speaker 7

Okay. Thank you. And then our second question was just on the guide for comp in the Q4. Is that primarily a function of The adverse weather trends that you mentioned in your prepared comments and the lapping of some of the tougher compares, is there anything else within The mid-20s decline that we should be that's driving that?

Speaker 6

Embedded in our guidance for Q4, if I were to speak to the high and low It's really based on the January trends we saw at the time we were putting together. The high end of the guide assumes some normalization from what we were seeing in January. And from a weather perspective, it did impact us quite a bit. We had 6 times more store impacts in January than we did in the previous year. When I look at the entire quarter, February last year did have more weather impacting, but we're still early in February and we don't know.

Speaker 6

So when we develop the guidance, we assume some normalization from the January trends at the high end of the guide. The low end of the guide assumes that January trends continue through the remainder of the quarter. And as I said in my prepared remarks, It's reflective of the continued pullback in the core and value oriented general merchandise. And we also are seeing more pressure in the non promotional time periods for the Alpha product line based on what we learned during Q3.

Speaker 7

Okay. Thank you.

Operator

Thank you. Our next question is from Christopher Horvers with JPMorgan. Please proceed with your question.

Speaker 8

Thanks guys. So my first question is, Do you have a sense of how much the Alpha anniversary sale pulled forward demand from into the Q3 from the Q4? It's always been a big event here in the spring and I know you moved it forward and it drives a lot of seasonality in that business. So I was Curious if you put some thoughts and numbers around that.

Speaker 6

Chris, I don't have a number to speak to from a pull forward standpoint, but Certainly, we are seeing that just on the normalization of the quarters from a revenue top line perspective, And that's what was anticipated in our Q4 guide.

Speaker 8

Got it. And then I guess as you think about What is left for that? You mentioned like outside of the promotional periods, there's not as much responsiveness on the Elfa side. So I guess What is sort of exist now in the Q4 to drive that business? And as we think about the upcoming year, Should we assume that the alpha sale goes back to its normal timing?

Speaker 5

Well, just to clarify, Chris, this is Satish. We do we are in Q4, we do have an Alpha event. And so the event that we were talking about earlier was our 75th anniversary event and that was an added event from what we normally do. And so that is something for you to pay attention to and as we think about fiscal 2024, our expectation is to still have 4 alpha events throughout the year. So the event that we have currently doesn't end until mid February and We still have a month and a half left to close out that quarter from that event and we definitely will continue to go after customers that have experienced a purchase with Alfa and see what we can do to make sure that they are able to take full Recognition of those installations, see what other potential alpha opportunities exist as well as completing those alpha purchases with completion products.

Speaker 5

So we still have a lot of exciting things to engage our customers with as we finish out Q4.

Speaker 8

Got it. And then I guess my last question is, as you think about like the current freight environment, More general merchandise is, I think, more from Asia. And then obviously, there's some stuff going on in the Middle East. So How are you thinking about the duration of this freight tailwind that you've seen in the gross margin line? And What are your thoughts on could that turn to a headwind?

Speaker 8

Are you contracted out? Or how are you managing that?

Speaker 6

Chris, in terms of freight, certainly we've experienced the benefit of tailwinds through fiscal 2023 based on the lower freight costs that we've been seeing throughout the fiscal year, we would expect that to continue a little bit, not as much in fiscal twenty twenty four in the first half of the year. But when we look at the Red Sea situation and some of the disruption that's going on there. We have limited routings through the Suez Canal, about less than 1% of our freight goes through there. The impact on global rates on the spot rates hasn't impacted us yet. We have about 85% of our shipments are under contract.

Speaker 6

And certainly, we're watching it as we move forward. It could be a potential risk depending on how long how prolonged the situation is. But from a volume standpoint, we don't have

Speaker 3

a whole lot of volume going through that part of the world.

Speaker 8

Got it. Thanks very much.

Speaker 2

Thanks, Chris.

Operator

Thank you. There are no further questions at this time. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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The Container Store Group Q3 2023
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