The Michaels Cos. reported a better-than-expected third-quarter performance, driven by strong demand in its stores and online, where sales surged 128%.
“We have strengthened our core business and put Michaels in a much stronger position today - operationally, financially, and strategically - than at the start of this year and I would like to extend my gratitude to every single Michaels team member whose hard work has enabled these results,” said Ashley Buchanan, CEO, Michaels.
The arts and crafts retailer announced it will pay approximately $10 million in one-time holiday bonuses to full-time and part-time employees in recognition of “their extraordinary work this year during unprecedented times.”
Michaels’ net income totaled $111.1 million, or $0.74 a share, for the quarter ended Oct. 31, up from $28.7 million, or $0.19 a share, in the year-ago period. Adjusted per-share earnings came to $0.86, topping the $0.59 per share analysts had expected.
Sales rose 15.1% to $1.406 billion, also more than expected. Same-store sales rose 16.3%, with strong demand in both stores and e-commerce.
E-commerce sales rose 128%, driven by enhanced omnichannel capabilities including curbside pick-up, same-day delivery, ship from store, buy online, pick-up in store, in-app purchases and more. Year-to-date e-commerce growth totaled 249%.
“Michaels delivered strong third-quarter results highlighted by comparable store sales growth of 16.3%, which was driven by robust consumer demand, improved retail execution and continued progress against our strategic initiatives,” said Buchanan. “Our expanded omnichannel capabilities, Maker-centric branding, and increasingly personalized marketing resonated well with customers.”
Buchanan said that the company also benefited from progress on ongoing efforts around strategic inventory management, streamlined store operations and a disciplined approach to pricing and promotions.
“Importantly, we strengthened our balance sheet by paying down $150 million in debt and increased our financial flexibility by refinancing and significantly extending the maturity of our term loan,” she said.