Shares of The Container Store (TCS - Get Report) dropped 5% to $4.10 in after-hours trading on Tuesday after the retailer reported third-quarter revenue and comparable-store sales that missed analysts' expectations.

Revenue rose 1.7% to $216.4 million year-over-year, but was slightly below Wall Street's expectations of $217.7 million. Comparable-store sales fell 3.9%, which was worse than the 2.5% drop forecast by analysts.

Holiday department sales contributed notably to the decline, though its closets business contributed 1.3% to third quarter comparable-store sales, the company said. 

"Our custom closets business, specifically elfa and TCS Closets, drove incremental sales and profit; however, holiday department sales were disappointing during the quarter and, as we expected, our annual elfa sale was impacted by fewer selling days combined with Christmas and New Year's Eve holidays falling on weekends," CEO Melissa Reiff said in a statement.

Adjusted earnings of 11 cents a share were in line with analysts' projections.

Container Store also now sees full-year earnings and comparable store-sales at the "low end" of its previous guidance. Revenue should be "modestly" below its prior outlook. 

In November, the company forecast fiscal 2016 earnings per share between 20 cents and 30 cents on revenue of $820 million to $830 million. Comparable-store sales for the full year were expected to decline between 1.5% and 3.0%.

Analysts surveyed by FactSet are expecting earnings of 23 cents per share on revenue of $821.8 million for fiscal 2016 and comparable-store sales falling 2.5%.

The company opened four new stores in the third quarter, ending the period with 86 stores compared with 77 as of Jan. 2, 2016.