Costs associated with the departure of its former CEO, Chuck Rubin, the closure of the company’s Pat Catan’s stores and lower comparable sales were factors that hit Michaels first quarter financial results.
For the first quarter ended May 4, Michaels posted net income of $37.7 million, or 24 cents per diluted share, versus $26.9 million, or 15 cents per diluted share, in the period a year previous. With one-time charges excluded, adjusted net income was $49 million, or 31 cents per diluted share, versus $70.9 million, or 39 cents per diluted share, in the quarter a year before.
Michaels matched a MarketBeat-published analyst consensus adjusted diluted earnings per share estimate of 31 cents.
Comparable sales decreased 2.9% in the quarter year over year, as customer transactions slipped, partially offset by an increase in average ticket. Net sales were $1.09 billion versus $1.16 billion in the quarter a year prior. Operating income was $92.7 million versus $78.9 million in the year-before period.
“While our first quarter results were within our range of expectations for the quarter, we are not satisfied and are taking steps to improve our performance,” said Mark Cosby, Michaels’s interim CEO. “Our team is focused on improving our current sales trend, executing against our key priorities to build momentum in the second half of fiscal 2019, and refreshing our long-term growth strategy to deliver stronger growth in 2020 and beyond.”