Arts and crafts giant cuts sales outlook

Michaels Cos. said increased spending cut into its bottom line in the second quarter. The chain lowered its same-stores outlook for the rest of the year, citing a “choppy” retail environment.



For the quarter ended July 30, the company posted a profit of $35.6 million, compared with $35.7 million in the year-ago period, amid spending to integrate recently-acquired arts and craft wholesaler Lamrite West and the timing of distribution expenses.



Net sales increased 7.7% to $1.06 billion. Same-store sales rose 0.7%.



“We are pleased that our team delivered second quarter results within our expectations, despite a retail environment which continues to be choppy,” said Chuck Rubin, chairman and CEO. “As anticipated, the quarter was uniquely challenged by the impact of investments we are making to support our Vision 2020 strategy, including the integration of Lamrite West and initiatives to reduce long-term product acquisition costs, as well as the unfavorable timing of distribution expenses. As we move into the second half of the year and into fiscal 2017, we expect to see the benefits of our strategic investments on sales and profitability.”