Michaels Q3 Net Jumps 36.2 Percent
IRVING, Texas-Reduced expenses and a slight uptick in sales helped Michaels to a 36.2 percent increase in third-quarter net income, to $64 million.
Selling, general and administrative expenses were trimmed by 1.6 percent in dollars and 74 basis points as a percentage of sales to 26.9 percent. In addition, Michaels managed to slash 33.9 percent from interest expense by the paying down of toggle notes (bonds in which the issuer can defer interest payments by agreeing to pay an increased amount in the future) and debt refinancing.
Net sales in the quarter, which ended on Nov. 1, totaled $1.1 billion, up 1.1 percent and including a 0.8 percent fall in same-store sales. Chuck Rubin, Michaels' CEO, said the retailer's customers "responded to our improved shopping environment, great exclusive product and compelling marketing events."
Rubin added that Michaels' fourth quarter will see the retailer make more progress in delivering "an exciting in-store and online shopping experience." The company is expecting total net sales growth of from 3 to 3.3 percent for the full fiscal year.