Investors are closely watching the change of leadership at Container Store Group Inc. (NYSE: TCS). The company is set to formally promote current COO, Melissa Reiff, to the position of CEO on July 1. She will replace Kip Tindell, who is stepping down after serving as CEO of TCS since the inception of the company in 1978. Reiff will be taking over at a time when TCS is modernizing its in-store communications system.
Will Reiff help set Container Store Group Inc. (NYSE: TCS) on profitability path?
Container Store Group Inc. (NYSE: TCS) has been a source of disappointment for investors in the recent years as sales continue to shrink and the bottom-line weakens. But it remains to be seen whether a change of guard will reverse the current trend. Reiff, who is set to take over the reins, is a veteran of the company. She joined TCS back in 1995 as VP of sales and marketing. In 2003, she was promoted to EVP of stores before adding another title as president of the company in 2006. In 2013, she earned another promotion that made her the COO of TCS.
But Reiff will be welcome by a full in-tray as she takes the CEO desk. Investors are expecting her to immediately put a stop to the sales decline and begin to steer the company toward long-term profitability. In its F4Q2015, Container Store Group Inc (NYSE: TCS) posted revenue of $232.1 million, indicating a slight improvement from $224.3 million in the like quarter a year earlier. The revenue also slightly topped the consensus estimate of $230.5 million. But it came on the back of a disastrous F3Q2015.
Although F4Q2015 EPS loss of $0.20 was in-line with the consensus estimate, TCS’s bottom-line has been deteriorating in the recent years.
With shares of TCS trading significantly below the IPO price, it appears there will be no honeymoon for Reiff in her new position as CEO.
In a move that is expected to bring more efficiency in store operations, Reiff is taking over the reins at a time when Container Store Group Inc. (NYSE: TCS) has embarked on a process of modernizing its stores. The company inked a deal with Theatro to help it replace its walkie-talkie gadgets for staff communications with wearable devices for more efficient and faster in-store communication. The wearable will be issued to 3,000 employees in 70 store locations.