An upbeat Michaels beats Street

The Michaels Companies reported better-than-expected earnings for the fourth quarter and also issued an upbeat forecast for 2017.



Michaels reported net income of $193.5 million for the quarter ended January 28, up 6.3% from $183.7 million in the year-ago period.



Net sales increased 4.1% to $1.8 billion, from $1.7 billion in the year-ago period. The company attributed the increase largely to its February 2016 acquisition of Lamrite West and sales from 19 additional stores.



Same-store sales decreased 1.0%, less than expected, driven by a decrease in customer transactions, which was partially offset by an increase in average ticket.



“Today, we reported fourth quarter results within our initial guidance, and I am encouraged that we delivered market share gains and increased earnings,” said Chuck Rubin, chairman and CEO. “Looking back on the year, I am pleased we increased our free cash flow to $450 million and utilized the strength of our balance sheet to deliver value to our shareholders.”



For 2017, Michael’s expects earnings per share of $2.05 to $2.17, well above Wall Street’s current view of $2.04.



As of January 28, 2017, Michaels operated 1,367 stores in 49 states and Canada under the brands Michaels, Aaron Brothers, and Pat Catan’s.