Shares of The Container Store (TCS - Get Report) plunged 10.19% to $3.88 in late-morning trading on Wednesday after the retailer posted disappointing third-quarter revenue and comparable-store sales after yesterday's market close.

Revenue increased 1.7% to $216.4 million over last year, but was lower than analysts' estimates of $217.7 million. Comparable-store sales slumped 3.9%, which was worse than the 2.5% decline expected by analysts.

Holiday department sales contributed notably to the drop, although the closets business contributed 1.3% to third quarter comparable-store sales, the Coppell, TX-based company said.

Following several quarters of soft sales trends, management is developing a new long-term strategic plan, which will be revealed by June, Jefferies analysts noted.

"Given management's recent focus it seems likely this could include a new store footprint that puts more emphasis on the closet business and design services. Meanwhile, Q3 saw negative same-store sales in the core business, leading to unanticipated promotions," analysts Daniel Binder and Dolph Warburton wrote in a note.

The company will be focusing a significant portion of its capital allocation toward remodeling more stores this year with a focus on custom closets. Container Store will also be testing alternative store formats, Barclays analyst Matthew McClintock noted.

But "we remain on the sidelines until better visibility into the company's strategic review," McClintock said.

Container Store is only planning four new stores in fiscal 2018 compared to consensus expectations for six. "With store traffic and sales declining faster than growth in the new closet business, this appears prudent. However, it is doubtful whether there will be enough data from these tests to influence the company's long-term strategic plan," Binder and Warburton said.