It was a sluggish first quarter for Michaels Companies, which reported flat net sales and a slip in comps, although net income edged up.
In the first quarter ended April 29, net sales were $1.16 billion, flat compared with net sales in the first quarter of fiscal 2016. Sales from the operation of 12 additional stores was offset by a decline in comparable store sales. Comparable store sales decreased 1.2% driven by a decrease in average ticket, the company said.
Net income increased 2% to $72.2 million, from $70.8 million in the first quarter of fiscal 2016. Excluding net non-recurring, inventory-related purchase accounting adjustments and integration expenses associated with the acquisition of Lamrite West, adjusted net income for the first quarter of fiscal 2016 was $75.5 million. Diluted earnings per share increased 11.8% to $0.38, from $0.34 in the first quarter of fiscal 2016.
During the quarter, the arts and crafts retailer opened three new Michaels stores and closed one Michaels store and five Aaron Brothers stores. At the end of the first quarter, the company operated 1,225 Michaels stores, 104 Aaron Brothers stores and 35 Pat Catan’s stores.
“I am encouraged with the improving trend in customer transactions this quarter, especially given the headwinds we faced as we anniversaried last year’s coloring trend,” said Chuck Rubin, chairman and CEO, Michaels. “We continue to make progress on our 2017 and long term operational and strategic priorities.”