The Container Store Group Inc (TCS) Third Quarter 2014 Earnings Call Transcript

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Chris Horvers, JP Morgan
Okay. The weather obviously, the timing of that was January and February because it was the time of the start of the sale?

Jodi Taylor, CFO, The Container Store
Absolutely. We had inclement weather go all the way through the end of the fiscal year. As you will recall, for us, with our fourth quarter having both the holidays and the annual elfa sale, that is obviously more significant or is significant to us in terms of an impact.

Chris Horvers, JP Morgan
Okay. Then squeeze one last one in. When you launched POP! Star, you talked about the customers really wanting more communication from The Container Store and that is what POP! Star enabled. I am curious what you have learned so far that surprised you one way or the other? Then you mentioned that incremental one trip plus from those who have been in the program a year. Can you tell whether that is a four-time visitor or a two-time visitor? Thanks very much.

Melissa Reiff, President, COO and Director, The Container Store
Right. Yes, you bet, Chris. Hi, it is Melissa, I can answer that I think. The POP! Star program, we have been extremely pleased, which as I said in my remarks, having 1.5 million POP! Stars. The early analytics from these customers who were part of the original pilot test that we did in California and that have been in the program over a year, as I said in my remarks, they have increased their visit by at least one trip. We think that is pretty wonderful as I said, because again, the top 30% of our customers give us 83% of our sales and many of those are POP! Stars.

Just think about that. If they come one more time, our top 30% come four times a year. If they come one more time, that is going to be pretty darn amazing. We are going to continue to collect all the data that we need to tie to each POP! Star, and we are going to continue to send out generic. Right now we are sending out generic surprise and delight offers. As I mentioned in the beginning of this year, we are going to be using more technology to customize our surprise and delight offers to them and communicate even more to them with offers and tips and all the communication that they have asked for.

Chris Horvers, JP Morgan
Thanks very much.

Operator
Thank you. Our next question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.

Joshua Siber , Morgan Stanley
This is Joshua Siber on for Simeon today. You guys mentioned you do not give monthly comps, but could you possibly speak directionally how compares look for the remainder of the quarter?

Melissa Reiff, President, COO and Director, The Container Store
Yes, I can. You want me to take that, Jodi? I am happy to. Hi, Josh. This is Melissa. We have been, as we always have, we are turning over every single rock. We think that we have a lot in play for this fourth quarter. As Kip said in his remarks, every week, every month, quarter, our initiatives, they become much more meaningful and we really have much more impact to the business.

Also, this has been really recently a very price promotional retail environment and we have resisted jumping into that. We are very, very passionate about balancing gross margin and revenues so that we lead to the highest level of profitability. We feel like without pricing power that is another key reason that our comp store sales so far to date have an increase of 2.7. We are also very, very, well-prepared for the rest of the quarter with our elfa sale in terms of, of course, all of our training and all of our service and we are optimistic.

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