TCS Container Store Group Inc

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

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Date of report (Date of earliest event reported): February 1, 2024

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THE CONTAINER STORE GROUP, INC.

(Exact name of registrant as specified in its charter)

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500 Freeport Parkway
Coppell, TX 75019
(Address of principal executive offices) (Zip Code)

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(972) 538-6000
(Registrant’s telephone number, including area code)

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N/A
(Former Name or Former Address, if Changed Since Last Report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 1.01 Entry into a Material Definitive Agreement

On February 1, 2024, The Container Store, Inc. (the “Tenant”), a wholly-owned subsidiary of The Container Store Group, Inc. (the “Company”), entered into a Seventh Amendment to Lease (the “Seventh Amendment”) to the Office, Warehouse and Distribution Center Lease Agreement dated October 8, 2002, as amended (the “Lease”), between Duke Secured Financing 2009 - 1ALZ, LLC, a Delaware limited liability company (as successor-in-interest to Duke Realty Limited Partnership, an Indiana limited partnership, as successor-in-interest to Texas Dugan Limited Partnership, a Delaware limited partnership) as the landlord, and the Tenant. Tenant’s obligations under the Lease are guaranteed by the Company.

The Seventh Amendment amends the Lease to, among other things, (i) extend the term of the lease for 120 months, commencing on May 1, 2025, such that the expiration of the Lease Term, as defined in the Lease, is amended to be April 30, 2035, and (ii) increase the monthly rental installments to be as follows:

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The foregoing description of the Seventh Amendment is qualified in its entirety by reference to the full text of the Seventh Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 2.02. Results of Operations and Financial Condition.

On February 6, 2024, The Container Store Group, Inc. (the “Company”) announced financial results for the quarter ended December 30, 2023. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly provided by specific reference in such a filing.

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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 of this Current Report on Form 8-K by reference

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 10.1

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SEVENTH AMENDMENT TO LEASE

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THIS  SEVENTH  AMENDMENT  TO  LEASE  (this  “Amendment”)  is  entered  into  as  of 01 February 2024 (the “Effective Date”), by and between DUKE SECURED FINANCING 2009 - 1ALZ, LLC, a Delaware limited liability company (as successor-in-interest to Duke Realty Limited Partnership, an Indiana limited partnership, as successor-in-interest to Texas Dugan Limited Partnership, a Delaware limited partnership) (“Landlord”) and THE CONTAINER STORE, INC., a Texas corporation (“Tenant”).

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W I T N E S S E T H:

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WHEREAS, Landlord’s predecessor-in-interest and Tenant entered into that certain Office, Warehouse and Distribution Center Lease Agreement dated October 8, 2002 (“Original Lease”), as amended by that certain First Amendment to Lease dated May 2, 2005 and by that certain Second Amendment to Lease dated November 23, 2005 and by that certain Third Amendment to Lease dated August 7, 2007 and by that certain Fourth Amendment to Lease dated August 24, 2011 and by that certain Fifth Amendment to Lease dated December 28, 2011 and by that certain Sixth Amendment to Lease dated June 10, 2016, pursuant to which Landlord leased to Tenant certain premises consisting of approximately 1,101,500 square feet located at 500 Freeport Parkway, Coppell, TX 75019 (the “Leased Premises”), such lease, as heretofore modified, being herein referred to as the “Lease”.

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WHEREAS, Tenant’s obligations under the Lease are unconditionally guaranteed by The Container Store Group, Inc., a Delaware corporation (“Guarantor”) pursuant to that certain Unconditional Guaranty of Lease (“Guaranty”) dated June 10, 2016.

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WHEREAS, Landlord and Tenant desire to modify the Lease on the terms and conditions set forth

below.

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A G R E E M E N T:

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NOW THEREFORE, in consideration of the Leased Premises and the mutual covenants hereinafter contained, the parties hereto agree as follows:

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1* Monthly Rental Installment of USD$619,593.75 is abated for this period.

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Tenant shall pay Operating Expenses and other reimbursable costs as provided in the Lease during the Third Extension Term.

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“Holding Over. If Tenant retains possession of the Leased Premises after the expiration of the Lease Term, such possession shall be subject to immediate termination by Landlord, and all terms of this Lease shall be applicable during such holdover period except i) any expansion, renewal, or similar right or option, and ii) Monthly Rental Installments of Minimum Annual Rent for the holdover period shall be 150% the then-effective Monthly Rental Installment. All other amounts payable under this Lease shall continue under the terms of this Lease. In addition, Tenant shall be liable for all damages incurred by Landlord as a result of such holding over; provided, however, that Landlord provides Tenant with thirty (30) days prior written notice that Landlord is in negotiations with another prospective tenant, and Tenant fails to thereafter surrender the Leased Premises in accordance with the Lease on, or prior to, the date identified in such Landlord’s notice which date shall not be sooner than 30 days following Tenant’s receipt of said Landlord notice. Holding over by Tenant (with or without consent of Landlord) shall not extend this Lease except as otherwise expressly provided, and this Paragraph shall not be construed as consent for Tenant to retain possession of the Leased Premises. For purposes of this Paragraph, “possession of the Leased Premises” shall continue until Tenant has surrendered the Leased Premises to Landlord as required in the Lease.”

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“Late Charges: If any payment required to be paid by Tenant to Landlord shall become overdue, Tenant shall pay to Landlord on demand as a late fee, and not a penalty, eight percent (8%) of any amount due for more than 5 days after the due date. Tenant shall not be obligated to pay the late charge until Landlord has given Tenant 10 days written notice of the delinquent payment (which may be given at any time during the delinquency); provided, however, that such notice shall not be required more than twice in any 12-month period.”

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Building (collectively “Energy Requirements”), and Tenant’s use and operations at the Building or Park contributes to Landlord incurring a penalty, fine, or fee as a result of non-compliance with such Energy Requirement, Tenant shall reimburse Landlord for such penalty, fine, or fee no later than 30 days following receipt of an invoice for such amount. In the event the Leased Premises is less than the entire area of the Building, Tenant’s obligation to reimburse Landlord for such penalty, fine, or fee shall be calculated based on the proportionate share of such penalty, fine, or fee which is attributable to Tenant’s use and operations at the Building as reasonably determined by Landlord; provided, however, in the event any such penalty, fine or fee is a result of any other tenant at the Building and Tenant use and operations at the Building or Park did not contribute to or result in the penalty, fine or fee, then Tenant shall not be required to reimburse Landlord for any portion of such penalty, fine or fee. To the extent Landlord’s consent is required, if Tenant requests Landlord’s consent to any alteration to comply with Energy Requirements, such consent shall not be unreasonably withheld conditioned or delayed.

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[Remainder of page is intentionally blank; signature page to follow]

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day and year first written above.

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ACKNOWLEDGMENT OF GUARANTOR:

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By executing this Amendment, the undersigned Guarantor, agrees to the modification of the Lease as set forth this Amendment and agrees that the Guaranty remains in full force and effect with respect to the Lease as so amended by this Amendment.

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GUARANTOR:

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THE CONTAINER STORE GROUP, INC.

a Delaware corporation

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EXHIBIT A: CONSTRUCTION

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(a)Landlord, at Landlord’s sole cost and expense, agrees to perform the following improvements (the “Seventh Amendment Landlord Improvements”):

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Seventh Amendment Landlord Improvements:

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Landlord shall endeavor to complete (i) the Phase I Seventh Amendment Landlord Improvements on or before April 30, 2024, and (ii) the Phase II Seventh Amendment Landlord Improvements on or before the July 31, 2024.

For the avoidance of doubt, in no event shall Landlord include the cost of such Seventh Amendment Landlord Improvements in Operating Expenses.

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In addition to the Seventh Amendment Landlord Improvements, Landlord shall pay for those certain improvements set forth below (the “Seventh Amendment TI Improvements”) up to a maximum amount of USD$2,203,000.00 (the “Seventh Amendment TI Allowance”) and Tenant shall pay for the approved costs in excess thereof. The cost of the Seventh Amendment TI Improvements shall be submitted to Tenant for Tenant’s prior approval in its sole and absolute discretion. If the approved cost of the Seventh Amendment TI Improvements is estimated to exceed such Seventh Amendment TI Allowance, such estimated overage shall be paid by Tenant before Landlord begins construction and a final adjusting payment shall be made when the Seventh Amendment TI Improvements are complete. Further, such Seventh Amendment TI Allowance shall only be available for use on Seventh Amendment TI Improvements that have been approved on or before December 31, 2025 (the “Allowance Deadline”), and Tenant hereby waives any and all rights to any unused portion of the Seventh Amendment TI Allowance which is not allocated to Seventh Amendment TI Improvements that have been approved prior to the Allowance Deadline, provided, however, the Allowance Deadline shall be delayed by one day for each day of Landlord Delay (as hereinafter defined) or Force Majeure. As used herein, “Landlord Delay” means Landlord’s failure to revise initial Tenant approved plans and specifications required for the completion of the Seventh Amendment TI Improvements within the timeframe expressly set forth in this Exhibit A subject to process set forth below or diligently commence and complete the Seventh Amendment TI Improvements.

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Seventh Amendment TI Improvements include, but are not limited to:

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Tenant may phase the Seventh Amendment TI Improvements. In the event the total Hard Costs (as hereinafter defined) to complete the Seventh Amendment TI Improvements exceed the Seventh Amendment TI Allowance, Landlord shall receive a construction management fee equal to 2% of the total Hard Costs to complete the Seventh Amendment TI Improvements, payable by Tenant within 30 days following receipt of Landlord's invoice following Tenant’s approval of the Seventh Amendment TI Improvement budget(s). “Hard Costs” shall mean the cost of labor and materials incorporated into the Leased Premises as permanent leasehold improvements only and shall not include any additional management fees therefor.

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The Seventh Amendment Landlord Improvements and the Seventh Amendment TI Improvements shall together be referred to as the “Seventh Amendment Improvements”.

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Landlord shall diligently perform and complete the Seventh Amendment Improvements in a good workmanlike manner and minimize interference with Tenant’s use of the Leased Premises.

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Within thirty (30) days after Tenant delivers the scope and required information for each phase of the Seventh Amendment TI Improvements, as required for the performance and completion

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of any Seventh Amendment TI Improvements, Landlord shall prepare and submit to Tenant, proposed plans and specifications for Tenant's review and written approval. Tenant shall review and approve in writing such proposed plans and specifications for the applicable Seventh Amendment TI Improvements. If Tenant disapproves of any such proposed plans and specifications Tenant shall provide Landlord with written notice of such disapproval, specifying, with reasonable particularity, the reason(s) for disapproval. In the event Tenant fails to respond to the proposed plans and specifications within ten (10) business days, such plans and specifications shall be deemed approved by Tenant as submitted by Landlord. If Tenant has disapproved of Landlord's proposed plans and specifications and has specified the reasons why, and Tenant's required changes to such proposed plans and specifications do not violate local building code requirements, then, Landlord shall revise the plans and specifications accordingly and resubmit such revised plans and specifications to Tenant within fifteen (15) days following the date of Tenant's written notice of disapproval. Such procedure for notice of disapproval with specific reasons shall be repeated with respect to any revisions to the plans and specifications, with Landlord and Tenant acting in good faith and with reasonable diligence with respect thereto, until the plans and specifications are approved. Landlord shall endeavor to apply for any required permits for each phase of the Seventh Amendment TI Improvements within ten (10) business days after the plans and specifications for such phase of the Seventh Amendment TI Improvements is approved, and thereafter diligently pursue such permits. Following approval of the plans and specifications for each phase of the Seventh Amendment TI Improvements, Landlord shall submit to Tenant the budget for such work for Tenant’s review and approval. Within ten (10) business days of Tenant’s receipt of the budget for such work, Tenant shall have the right to approve of such budget, disapprove of such budget, or revise the scope of the work. If Tenant elects to revise the scope of the work and such revisions require the approved plans and specifications to be modified, then Landlord shall have fifteen (15) business days to revise such plans and specifications and resubmit the same to Tenant for Tenant’s review and approval pursuant to the procedure set forth above. Tenant shall have the right to require Landlord to obtain bids from and/or use Tenant’s preferred vendors for (i) architectural plans, (ii) any HVAC work, and/or

(iii) any work to the security systems.

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Landlord shall commence the performance of each phase of the Seventh Amendment TI Improvements promptly following Tenant approval of the budget for such phase of the Seventh Amendment TI Improvements and issuance of any required permits for such phase and thereafter diligently pursue such improvements to completion.

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(b)If Tenant shall desire any changes to the Seventh Amendment TI Improvements, Tenant shall advise Landlord in writing and Landlord shall reasonably determine whether such changes can be made in a reasonable and feasible manner. If such change or any other change required during the course of constructing the Seventh Amendment TI Improvements will result in an increase in the cost of the Seventh Amendment TI Improvements, then Landlord shall inform Tenant in writing of such increase in cost and Tenant shall have (i) seven (7) business days thereafter to provide its approval or disapproval for the initial approval of the costs of the Seventh Amendment TI Improvements, and (ii) seven (7) business days thereafter to provide its approval or disapproval for any subsequent change order approvals of the Seventh Amendment TI Improvements. If Tenant does not respond with an election or rejection within the applicable period, then Tenant shall be deemed to have rejected such change. All such approved costs in excess of the available Seventh Amendment TI Allowance of making any changes to the Seventh Amendment TI Improvements which Tenant may request and which Landlord may reasonably agree to shall be at Tenant's sole cost and expense and shall be paid to Landlord within 30 days of written demand and before execution of the change order.

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(c)All plans and specifications, budgets, change orders, or any other item requiring Tenant’s review and approval in connection with the Seventh Amendment TI Improvements shall be sent by email to Kristen Cairns at KBCairns@containerstore.com; Maggie Aplis at mlaplis@containerstore.com; Pete Fitzgibbon at petef@containerstore.com; and Robert Higgins rdhiggins@containerstore.com, or such other email or address as Tenant may direct Landlord in writing.

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(c)As soon as the Seventh Amendment Improvements have been Substantially Completed, Landlord shall notify Tenant in writing of the date that the Seventh Amendment Improvements were Substantially Completed. The Seventh Amendment Improvements shall be deemed substantially completed ("Substantially Completed" or “Substantial Completion”) when, in the reasonable opinion of the construction manager (whether an employee or agent of Landlord or a third party construction manager) ("Construction Manager"), the Seventh Amendment Improvements are substantially completed except for punch list items which do not prevent in any material way the use of the Seventh Amendment Improvements for the purposes for which they were intended. Tenant and Landlord shall complete a joint inspection of the Leased Premises promptly following Substantial Completion of the Seventh Amendment Improvements and shall prepare a written mutually agreed to list of punch list items to be completed by Landlord and

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Landlord shall endeavor to complete such items within thirty (30) days following Substantial Completion. In the event Tenant, its employees, agents, or contractors cause construction of such Seventh Amendment Improvements to be delayed for any reason, including, but not limited to, change orders, request for long lead items, or Tenant’s interference with construction, the date of Substantial Completion shall be deemed to be the date that, in the opinion of the Construction Manager, Substantial Completion would have occurred if such delays had not taken place, and such delays shall not cause a deferral of the Third Extension Term Commencement Date. After the date the Seventh Amendment Improvements are Substantially Completed Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of the Seventh Amendment Improvements, subject to completion of the punch list items, if any. In the event of any dispute as to the Seventh Amendment Improvements the certificate of the architect or general contractor for the Seventh Amendment Improvements shall be presumptive evidence that Substantial Completion was achieved, other than the punch list items.

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EXHIBIT B: TWO RENEWAL OPTIONS AT MARKET

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(a)Provided that as of the time of the giving of the Fourth Extension Notice and the Commencement Date of the Fourth Extension Term, (x) Tenant is the Tenant originally named herein or a Permitted Transferee, (y) Tenant actually occupies all of the Leased Premises initially demised under the Lease and any space added to the Leased Premises, and (z) no Default exists beyond applicable notice and cure periods; then Tenant shall have the right to extend the Lease Term for an additional term of 60 months (such additional term is hereinafter called the "Fourth Extension Term") commencing on the day following the expiration of the Third Extension Term (hereinafter referred to as the "Commencement Date of the Fourth Extension Term"). Tenant shall give Landlord notice (hereinafter called the "Fourth Extension Notice") of its election to extend the term of the Lease Term at least 12 months, but not more than 18 months, prior to the scheduled expiration date of the Third Extension Term.

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(b)Provided that as of the time of the giving of the Fifth Extension Notice and the Commencement Date of the Fifth Extension Term, (x) Tenant is the Tenant originally named herein or a Permitted Transferee, (y) Tenant actually occupies all of the Leased Premises initially demised under the Lease and any space added to the Leased Premises, and (z) no Default exists beyond applicable notice and cure periods; then Tenant shall have the right to extend the Lease Term for an additional term of 60 months (such additional term is hereinafter called the "Fifth Extension Term") commencing on the day following the expiration of the Fourth Extension Term (hereinafter referred to as the "Commencement Date of the Fifth Extension Term"). Tenant shall give Landlord notice (hereinafter called the "Fifth Extension Notice") of its election to extend the term of the Lease Term at least 12 months, but not more than 18 months, prior to the scheduled expiration date of the Fourth Extension Term.

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(c)The Minimum Annual Rent payable by Tenant to Landlord during the Fourth Extension Term and the Fifth Extension Term, as applicable, shall be the then Fair Market Rent as defined below.

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(d)The term "Fair Market Rent" shall mean the Minimum Annual Rent, expressed as an annual rent per square foot of floor area, which Landlord would have received from leasing the Leased Premises for the Fourth Extension Term, or Fifth Extension Term (whichever is applicable) to an unaffiliated person which is not then a tenant in the Park, assuming that such space were to be delivered in "as-is" condition, and taking into account the rental which such other tenant would most likely have paid for such premises, including market escalations and all other relevant factors. Fair Market Rent shall not be reduced by reason of any costs or expenses saved by Landlord by reason of Landlord's not having to find a new tenant for the Leased Premises (including without limitation brokerage commissions, cost of improvements necessary to prepare the space for such tenant's occupancy, rent concession, or lost rental income during any vacancy period). Fair Market Rent means only the rent component defined as Minimum Annual Rent in the Lease and does not include reimbursements and payments by Tenant to Landlord with respect to Operating Expenses and other items payable or reimbursable by Tenant under the Lease. In addition to its obligation to pay Minimum Annual Rent (as determined herein), Tenant shall continue to pay and reimburse Landlord as set forth in the Lease with respect to such Operating Expenses and other items with respect to the Leased Premises during the Fourth Extension Term or Fifth Extension Term (whichever is applicable). The arbitration process described below shall be limited to the determination of the Minimum Annual Rent and shall not affect or otherwise reduce or modify the Tenant's obligation to pay or reimburse Landlord for such Operating Expenses and other reimbursable items.

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(e)Landlord shall notify Tenant of its determination of the Fair Market Rent (which shall be made in Landlord's sole, but good faith, discretion) for the Fourth Extension Term or Fifth Extension Term (whichever is applicable) within thirty (30) days after delivery of the Fourth Extension Notice or Fifth Extension Notice (as applicable), and Tenant shall, within 20 days of receipt of Landlord's notice, either (i) accept Landlord’s determination, (ii) revoke its election to extend the term of this Lease; or (iii) notify Landlord of any objection. Failure to respond within the 20-day period shall constitute Tenant's objection of such Fair Market Rent. If Tenant objects or has been deemed to have objected by Tenant’s failure to timely respond to Landlord’s notice, Landlord and Tenant shall commence negotiations to attempt to agree upon the Fair Market Rent within 30 days of Landlord's receipt of Tenant's notice or deemed objection. If the parties cannot agree, each acting in good faith but without any obligation to agree, then the Lease Term shall not be extended and shall terminate on its scheduled termination date and Tenant shall have no further right hereunder or any remedy by reason of the parties' failure to agree unless Tenant or Landlord invokes the arbitration procedure provided below to determine the Fair Market Rent.

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(f)Arbitration to determine the Fair Market Rent shall be in accordance with the Real Estate Valuation Arbitration Rules of the American Arbitration Association. Unless otherwise required by state law, arbitration shall be conducted in the metropolitan area where the Park is located by a single arbitrator unaffiliated with either party. Either party may elect to arbitrate by sending written notice to the other party and the Regional

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Office of the American Arbitration Association within 5 days after the 30-day negotiating period provided in Paragraph (e), invoking the binding arbitration provisions of this paragraph. Landlord and Tenant shall each submit to the arbitrator their respective proposal of Fair Market Rent. The arbitrator must choose between the Landlord's proposal and the Tenant's proposal and may not compromise between the two or select some other amount. The cost of the arbitration shall be paid by Tenant if the Fair Market Rent is that proposed by Landlord and by Landlord if the Fair Market Rent is that proposed by Tenant; and shall be borne equally otherwise. If the arbitrator has not determined the Fair Market Rent as of the end of the Lease Term, Tenant shall pay 105 percent of the Minimum Annual Rent in effect under the Lease as of the end of the Lease Term until the Fair Market Rent is determined as provided herein. Upon such determination, Landlord and Tenant shall make the appropriate adjustments to the payments between them.

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(g)The parties consent to the jurisdiction of any appropriate court to enforce the arbitration provisions of this Exhibit and to enter judgment upon the decision of the arbitrator.

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(h)The determination of Minimum Annual Rent does not reduce the Tenant's obligation to pay or reimburse Landlord for Operating Expenses and other reimbursable items as set forth in the Lease, and Tenant shall reimburse and pay Landlord as set forth in the Lease with respect to such Operating Expenses and other items with respect to the Leased Premises during the Fourth Extension Term and Fifth Extension Term without regard to any cap on such expenses set forth in the Lease.

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(i)Except for the Minimum Annual Rent as determined above, Tenant's occupancy of the Leased Premises during the Fourth Extension Term and the Fifth Extension Term shall be on the same terms and conditions as are in effect immediately prior to the expiration of the Third Extension Term or the Fourth Extension Term; provided, however, Tenant shall have no further right to any allowances, credits or abatements or any options to expand, contract, renew or extend the Lease beyond the Fifth Extension Term.

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(j)If Tenant does not give the Fourth Extension Notice within the period set forth in paragraph(a) above, Tenant's right to extend the Lease Term for the Fourth Extension Term and the Fifth Extension Term shall automatically terminate. If Tenant does not give the Fifth Extension Notice within the period set forth in paragraph (b) above, Tenant's right to extend the Lease Term for the Fifth Extension Term shall automatically terminate. Time is of the essence as to the giving of the Fourth Extension Notice and Fifth Extension Notice.

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(k)Landlord shall have no obligation to refurbish or otherwise improve the Leased Premises for the Fourth Extension Term or the Fifth Extension Term. The Leased Premises shall be tendered on the Commencement Date of the Fourth Extension Term and Fifth Extension Term in "as-is" condition, subject to Landlord’s repair, maintenance, or replacement obligations set forth in the Lease.

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(l)If the Lease is extended for either the Fourth Extension Term or Fifth Extension Term, then Landlord shall prepare and Tenant shall execute an amendment to the Lease confirming the extension of the Lease Term and the other provisions applicable thereto.

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(m)If Tenant exercises its right to extend the term of the Lease for the Fourth Extension Term or Fifth Extension Term pursuant to this Exhibit, the term "Lease Term" as used in the Lease, shall be construed to include, when practicable, the Fourth Extension Term or Fifth Extension Term, as applicable, except as provided in (i) above.

Exhibit 99.1

The Container Store Group, Inc. Announces Third Quarter 2023 Financial Results

Third quarter consolidated net sales of $214.9 million, down 14.8% compared to the third quarter of fiscal 2022

Comparable store sales^ down 16.8% compared to the third quarter of fiscal 2022

Third quarter net loss per share of $0.13, compared to earnings per diluted share of $0.08 in the third quarter of fiscal 2022; Adjusted net loss per share* of $0.08 compared to adjusted net income per diluted share of $0.08 in the third quarter of fiscal 2022

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Updates Fiscal 2023 Earnings Outlook

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Coppell, TX — February 6, 2024 — The Container Store Group, Inc. (NYSE: TCS) (the “Company”), today announced its financial results for the third quarter of fiscal 2023 ended December 30, 2023.

For the third quarter of fiscal 2023:

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Satish Malhotra, Chief Executive Officer and President of The Container Store, commented, “As we discussed in our commentary ahead of the ICR Conference last month, our third quarter sales reflected similar trends to what we experienced in the second quarter as our general merchandise categories weighed on results while our Custom Spaces assortment relatively outperformed. In fact, Custom Spaces saw sequential improvement in comparable store sales declines from the second quarter driven by improved performance in our elfa® product line and strength in our premium, wood-based line, Preston®. Despite the sales shortfall from our original guidance, promotional discipline and tight cost management enabled us to deliver bottom line results within our original outlook range.”

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Mr. Malhotra continued, “Given the landscape we are navigating, we plan to continue to manage expenses and capital allocation with great discipline. We continue to lean into our competitive strengths and differentiation in Custom Spaces and complementary premium general merchandise, where we see significant growth opportunity.

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Third Quarter Fiscal 2023 Results

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For the third quarter (thirteen weeks) ended December 30, 2023:

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For the fiscal year-to-date (thirty-nine weeks) ended December 30, 2023:

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New and Existing Stores

As of December 30, 2023, the Company store base was 100 as compared to 95 as of December 31, 2022. The Company opened two stores during the third quarter of fiscal 2023.

Balance sheet and liquidity highlights:

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Share repurchase

There were no repurchases during the third quarter of fiscal 2023. The Company has $25 million remaining of the original $30 million authorization for share repurchases.

Outlook

The Company today provided the following financial outlook for the fiscal fourth quarter ending on March 30, 2024:

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⁽¹⁾ Effective tax rate for fiscal year ending March 30, 2024 includes $2.6 million of discrete income tax expense recorded in the third quarter of fiscal 2023 related to the expiration of certain stock options granted in connection with our initial public offering in 2013.

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The Company plans to open two new small format stores in the remainder of fiscal 2023. Looking forward to fiscal 2024, we are planning to open four new stores and close one location. We also plan to relocate our San Francisco store to a nearby location in June 2024. The two new store openings planned before the end of fiscal 2023 are as follows:

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References

* See Reconciliation of GAAP to Non-GAAP Financial Measures table.

+ Custom Spaces includes metal-based and wood-based custom space products and in-home installation services.

^ Comparable store sales includes all net sales from our TCS segment, except for sales from stores open less than sixteen months, stores that have been closed permanently, stores that have been closed temporarily for more than seven days and Closet Works sales to third parties.

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Conference Call Information

A conference call to discuss third quarter fiscal 2023 financial results is scheduled for today, February 6, 2024, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-407-3982 (international callers please dial 201-493-6780) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.containerstore.com.

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A taped replay of the conference call will be available within three hours of the conclusion of the call and can be accessed both online and by dialing 844-512-2921 (international callers please dial 412-317-6671). The pin number to access the telephone replay is 13742837. The replay will be available until March 6, 2024.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our goals, strategies, priorities and initiatives including future store openings and closures; expected expense management; future opportunities; the impact of macroeconomic conditions and our anticipated financial performance and long-term targets.

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These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: a decline in the health of the economy and the purchase of discretionary items; results of operations and financial condition; our ability to continue to lease space on favorable terms; costs and risks relating to new store openings; quarterly and seasonal fluctuations in our operating results; cost increases that are beyond our control; our inability to protect our brand; our failure or inability to protect our intellectual property rights; our inability to source and market new products to meet consumer preferences; failure to successfully anticipate, or manage inventory commensurate with, consumer preferences and demand; competition from other stores and internet-based competition; our inability to obtain merchandise from our vendors on a timely basis and at competitive prices; vendors may sell similar or identical products to our competitors; our and our vendors’ vulnerability to natural disasters and other unexpected events; disruptions at our manufacturing facilities; product recalls and/or product liability, as well as changes in product safety and other consumer protection laws; risks relating to operating multiple distribution centers; our dependence on foreign imports for our merchandise; our reliance upon independent third party transportation providers; our inability to effectively manage our online sales; effects of a security breach or cyber-attack of our website or information technology systems, including relating to our use of third-party web service providers; damage to, or interruptions in, our information systems as a result of external factors, working from home arrangements, staffing shortages and difficulties in updating our existing software or developing or implementing new software; failure to comply with laws and regulations relating to privacy, data protection, and

consumer protection; our indebtedness may restrict our current and future operations, and we may not be able to refinance our debt on favorable terms, or at all; fluctuations in currency exchange rates; our inability to maintain sufficient levels of cash flow to meet growth expectations; our fixed lease obligations; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; changes to global markets and inability to predict future interest expenses; our reliance on key executive management; our inability to find, train and retain key personnel; labor relations difficulties; increases in health care costs and labor costs; violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws; impairment charges and effects of changes in estimates or projections used to assess the fair value of our assets; effects of tax reform and other tax fluctuations; significant fluctuations in the price of our common stock; substantial future sales of our common stock, or the perception that such sales may occur, which could depress the price of our common stock; risks related to being a public company; our performance meeting guidance provided to the public; anti-takeover provisions in our governing documents, which could delay or prevent a change in control; acquisition-related risks and our failure to establish and maintain effective internal controls.

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These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, (the “SEC”) on May 26, 2023 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

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About The Container Store

The Container Store Group, Inc. (NYSE: TCS) is the nation’s leading specialty retailer of organizing solutions, custom spaces, and in-home services – a concept they originated in 1978. Today, with locations nationwide, the retailer offers more than 10,000 products designed to transform lives through the power of organization.

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Visit www.containerstore.com for more information about products, store locations, services offered and real-life inspiration.

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Follow The Container Store on Facebook, X, Instagram, TikTok, YouTube, Pinterest and LinkedIn.

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The Container Store Group, Inc.

Consolidated statements of operations

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The Container Store Group, Inc.

Consolidated balance sheets

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The Container Store Group, Inc.

Consolidated balance sheets (continued)

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The Container Store Group, Inc.

Consolidated statements of cash flows

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Note Regarding Non-GAAP Information

This press release includes financial measures that are not calculated in accordance with GAAP, including adjusted net income (loss), adjusted net income (loss) per common share - diluted, Adjusted EBITDA, and free cash flow. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in a table accompanying this release. These non-GAAP measures should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP and they should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures are key metrics used by management, the Company’s board of directors, and Leonard Green and Partners, L.P., to assess its financial performance.

The Company presents adjusted net income (loss), adjusted net income (loss) per common share - diluted, and Adjusted EBITDA because it believes they assist investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance and because the Company believes it is useful for investors to see the measures that management uses to evaluate the Company. These non-GAAP measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. In evaluating these non-GAAP measures, you should be aware that in the future the Company will incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of these non-GAAP measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using non-GAAP measures supplementally. These non-GAAP measures are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.

The Company defines adjusted net income (loss) as net income (loss) before restructuring charges, severance charges, acquisition-related costs, impairment charges related to intangible assets, loss on extinguishment of debt, certain losses (gains) on disposal of assets, legal settlements and the tax impact of these adjustments and other unusual or infrequent tax items. We define adjusted net income (loss) per common share - diluted as adjusted net income (loss) divided by the diluted weighted average common shares outstanding. We use adjusted net income (loss) and adjusted net income (loss) per common share - diluted to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. We present adjusted net income (loss) and adjusted net income (loss) per common share - diluted because we believe they assist investors in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance and because we believe it is useful for investors to see the measures that management uses to evaluate the Company.

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The Company defines EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is calculated in accordance with the Company’s credit facilities and is one of the components for performance evaluation under its executive compensation programs. Adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items, including certain non-cash and other items that the Company does not consider in its evaluation of ongoing operating performance from period to period. The Company uses Adjusted EBITDA in connection with covenant compliance and executive performance evaluations, and to supplement GAAP measures of performance to evaluate the effectiveness of its business strategies, to make budgeting decisions and to compare its performance against that of other peer companies using similar measures. The Company believes it is useful for investors to see the measures that management uses to evaluate the Company, its executives and its covenant compliance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry.

The Company presents free cash flow, which the Company defines as net cash provided by operating activities in a period minus payments for property and equipment made in that period, because it believes it is a useful indicator of the Company’s overall liquidity, as the amount of free cash flow generated in any period is representative of cash that is available for debt repayment, investment, and other discretionary and non-discretionary cash uses. Accordingly, we believe that free cash flow provides useful information to investors in understanding and evaluating our liquidity in the same manner as management. Our definition of free cash flow is limited in that it does not solely

represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our Consolidated Statements of Cash Flows. Although other companies report their free cash flow, numerous methods may exist for calculating a company’s free cash flow. As a result, the method used by our management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.

Additionally, this press release refers to the change in Elfa third-party net sales after the conversion of Elfa’s net sales from Swedish krona to U.S. dollars using the prior year’s conversion rate, which is a financial measure not calculated in accordance with GAAP. The Company believes the disclosure of the change in Elfa third-party net sales without the effects of currency exchange rate fluctuations helps investors understand the Company’s underlying performance.

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The Container Store Group, Inc. Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
(unaudited)

The table below reconciles the non-GAAP financial measures of adjusted net income (loss) and adjusted net income (loss) per common share - diluted with the most directly comparable GAAP financial measures of GAAP net income (loss) and GAAP net income (loss) per common share - diluted.

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The table below reconciles the non-GAAP financial measure Adjusted EBITDA with the most directly comparable GAAP financial measure of GAAP net income (loss).

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