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Michaels Net Grows for Q4, Drops for FY

MichaelsIRVING, Texas-Fourth-quarter net income for craft specialty retailer Michaels jumped 18 percent to $157 million, bringing its net income for the fiscal year ending on Jan. 31 to $217 million, down 10.7 percent from the prior fiscal year.

Net sales in the quarter totaled $1.6 billion, up 3.4 percent and including a same-store sales gain of 1.4 percent. For the year, net sales were up 3.7 percent to $4.7 billion, including a pickup of 1.7 percent in same-store sales.

Chuck Rubin, Michaels’ CEO, said the fourth-quarter numbers “reflect continued strong execution of our multiyear strategy. Our holiday presentation leveraged the learnings from our store remodel program to showcase a larger and more cohesive offering, supported by engaging marketing. We achieved solid performance across categories and geographies as our customers recognized and responded to the improvements that we have put in place.”

Gross margin in the quarter rose 117 basis points to 41.2 percent. Selling, general and administrative expenses increased 8.7 percent in dollars and 110 basis points as a percentage of sales, to 22.6 percent.

For this year, Michaels has projected total sales growth of from 3.2 to 3.7 percent, with same-store sales growth of from 1.5 to 2 percent. Rubin said the company “will continue to build upon our vision 2020 strategy to deliver a strong in-store and online shopping experience, increase our market share and expand our customer base.”