Michaels beats Street even with hurricane disruptions
Michaels Companies topped estimates in its third quarter as back-to-school and Halloween sales helped drive growth both offline and online.
Net income increased 4.3% to $79.8 million, or 44 cents a share, for the quarter ended Oct.28, compared to $76.5 million, or 37 cents a share, in the year-ago period.
Net sales increased 1.1% to $1.24 billion, inclusive of an estimated $10 million in lost sales related to Hurricanes Harvey and Irma. Same-store sales inched up 1.0%.
"We are seeing nice momentum in our business, excluding the disruption from the hurricanes, and we are encouraged by the customer’s response to the improvements we have made, both in-stores and online, to make it easier for customers to make” said Chuck Rubin, chairman and CEO. “As we turn to the fourth quarter, we believe our holiday assortment is bigger and better than ever, and our teams are ready to serve customers, both in stores and online. We are pleased with the start to the quarter, although we recognize the heart of the season still lies ahead."
On the chain's quarterly call with analysts, Rubin said that online sales doubled in the quarter over the prior-year period
"We believe e-commerce is an important complement to our brick-and-mortar experience, and we believe our e-commerce penetration will grow to the high single digits as part of our total sales," he said.
At the end of the third quarter, the company operated 1,237 Michaels stores, 98 Aaron Brothers stores, and 36 Pat Catan’s stores.
Michaels is now expecting fourth-quarter same-store sales growth of 1.5% to 2.5% and earnings per share of $1.15 to $1.18. The FactSet consensus is for same-store sales growth of 1.9% and earnings per share of $1.14.
Net income increased 4.3% to $79.8 million, or 44 cents a share, for the quarter ended Oct.28, compared to $76.5 million, or 37 cents a share, in the year-ago period.
Net sales increased 1.1% to $1.24 billion, inclusive of an estimated $10 million in lost sales related to Hurricanes Harvey and Irma. Same-store sales inched up 1.0%.
"We are seeing nice momentum in our business, excluding the disruption from the hurricanes, and we are encouraged by the customer’s response to the improvements we have made, both in-stores and online, to make it easier for customers to make” said Chuck Rubin, chairman and CEO. “As we turn to the fourth quarter, we believe our holiday assortment is bigger and better than ever, and our teams are ready to serve customers, both in stores and online. We are pleased with the start to the quarter, although we recognize the heart of the season still lies ahead."
On the chain's quarterly call with analysts, Rubin said that online sales doubled in the quarter over the prior-year period
"We believe e-commerce is an important complement to our brick-and-mortar experience, and we believe our e-commerce penetration will grow to the high single digits as part of our total sales," he said.
At the end of the third quarter, the company operated 1,237 Michaels stores, 98 Aaron Brothers stores, and 36 Pat Catan’s stores.
Michaels is now expecting fourth-quarter same-store sales growth of 1.5% to 2.5% and earnings per share of $1.15 to $1.18. The FactSet consensus is for same-store sales growth of 1.9% and earnings per share of $1.14.