The Michaels Cos. swung to a first-quarter loss and missed bottom and top-line expectations as its stores went dark shuttered temporarily during COVID-19 pandemic.
The arts and crafts retailer reported a net loss of $63.5 million, or $0.43 a share, in the quarter ended May 2, compared to income of $37.7 million, or $0.24 a share, in the year-earlier period. The company's adjusted per-share loss was also $0.43.
Sales decreased to $799.9 million from $1.094 billion. Same-store sales fell 27.6%.
Michaels rolled out new omnichannel capabilities during the quarter, including curbside pick-up and same-day delivery, expanded ship from store and BOPIS and enabled in-app purchases. The new offerings helped drive 296% e-commerce growth.
“This quarter, we significantly accelerated Michaels’ transformation into an omnichannel retailer by introducing a robust set of customer-facing digital and fulfillment capabilities, CEO Ashley Buchanan stated. “As we reopen stores, we are encouraged by the trends we are seeing. Moving through the rest of the year, we will continue to introduce additional capabilities that enable us to serve customers wherever and however they want to shop.”
As of June 4, Michaels has reopened approximately 1,000 of its 1,273 stores, with enhanced customer and employee safety measures in place. It expects that “substantially” all of its stores will be open by the end of June.
Michaels ended the quarter with cash of $926.8 million, due to actions including a drawdown of a revolving credit facility.
"The company expects to have sufficient liquidity to fund planned capital expenditures, working capital requirements, debt service requirements and anticipated growth for the foreseeable future," Michaels stated.