Q2 comp-store sales dip at Michaels

IRVING, Texas — Same-store sales at Michaels Stores decreased 1.3% for the second quarter ended August 3. The dip was due, in part, to a 3.6% decrease in transactions and a 0.4% decrease in deferred custom framing revenue, partially offset by a 2.7% increase in the company's average ticket.

The company experienced its strongest sales performance during the quarter in home accents and yarn.

Net sales increased 1.3% to $904 million from $892 million during the prior-year quarter. Gross profit for the quarter decreased 0.6% to $337 million from $339 million during the prior-year quarter. Gross profit decreased approximately 70 basis points to 37.3% as a percent of net sales; however, merchandise margin improved by 80 basis points.

Net income for the quarter increased 53.8% to $20 million and as a percent of net sales increased 90 basis points to 2.3%.

During the quarter, the company opened six Michaels stores and relocated four. In addition, Aaron Brothers relocated one store and closed one. The company operated 45 net new Michaels stores at the end of the second quarter compared to the same period last year. The company now operates 1,241 stores, including 1,119 Michaels stores and 122 Aaron Brothers stores.

The specialty retailer of arts, crafts, framing, floral, wall décor and seasonal merchandise for the hobbyist and do-it-yourself home decorator produces 11 exclusive private brands, including Recollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, Art Minds, Artist's Loft, Craft Smart, Loops & Threads and Imagin8.