Dive Brief:

• Buoyed by interest in the home (which has risen during the pandemic) and in organization (which has been fostered by Netflix programming), The Container Store this week reported a profitable first quarter for the first time in over a decade. First quarter net income rose significantly year over year to $17.7 million from a net loss of $16.7 million a year ago. 

• The retailer didn't provide store comp data, saying in a press release that last year's extensive store closures due to the pandemic render that metric meaningless. Gross margin ballooned thanks in large part to fewer shipping costs as customers bought more in stores, expanding by 800 basis points to 59.6%. 

• Net sales in the period rose 61.7% year over year to $245.3 million, a 17.1% increase from 2019, per the release. In the retail business, net sales rose 64.1% to $228.7 million, with a 58.6% increase in its Custom Closets sales. Its third-party Elfa sales rose 34.8% to $16.6 million.

Dive Insight:

The Container Store has been in the midst of a turnaround for years, turning to more specialized products and services like closet organization to boost sales and margins.

The pandemic seems to have been a boon. As consumers spend more time at home, several retailers have benefited from their willingness to splurge on fixing up their spaces.

But few get their wares highlighted during popular streaming events, as The Container Store has repeatedly during Netflix shows "Get Organized with The Home Edit" and "Tidying Up with Marie Kondo," both programs with before-and-after home makeover formats that employ the very items that are The Container Store's specialty. "Get Organized with The Home Edit" in particular often name-checks the retailer and its experts are seen lugging huge bags labeled "Container Store" on their way to rescuing disorganized spaces.

The retailer is not just passively benefitting, however. In July it launched a line of sustainable products dubbed "The Home Edit Wooden collection," which CEO Satish Malhotra told analysts "celebrates The Home Edit passion for multifunctional solutions to maximize spaces throughout the home by storing everything from toys to pantry items and kitchen utensils."

"We are equally thrilled about Marie Kondo's upcoming Netflix series, Sparking Joy, available for subscribers on Aug. 31," he said during a Tuesday conference call, according to a transcript from Seeking Alpha.

The company is also collecting new fans. Its loyalty program, linked to about three quarters of its sales, had nearly 10.3 million members at the end of the quarter, a 15% increase from a year ago, Malhotra said. Its stores are also playing an important role in that: After finding that customers who had been assisted in stores gave out higher net promoter score compared to those who weren't helped, more associates are being assigned in "key areas of the store," he said.

The Container Store is rethinking the stores themselves, opening a smaller format in Annapolis, Maryland, this quarter and an even smaller, 12,000 square foot location in Colorado Springs, Colorado, next year. Malhotra said the company is also expanding store-based fulfillment, improving its website and introducing mobile point-of-sale.

The company has also revamped its business-to-business operations and its sales to the interior design trade, he said.