Michaels beat Wall Street estimates in the first quarter, although results were impacted by the restructuring of the company’s Aaron Bros. business.
In the first quarter, Michaels recorded net income of $26.9 million, or 15 cents per diluted share, versus $72.2 million, or 38 cents per diluted share, in the year-earlier quarter.
Adjusted net income for the quarter, excluding a one-time charge associated with the restructuring of the company’s Aaron Bros. business, was $70.9 million, or 39 cents per share. Adjusted earnings per share in the quarter topped a MarketBeat consensus analyst estimate by a penny.
In the quarter, Michaels comparable store sales increased 0.4% based on an increase in average ticket, partially offset by a decrease in customer transactions. On a constant currency basis, comps were flat versus the period a year earlier. Net sales were $1.16 billion, basically flat from the quarter in the fiscal year before.
Operating income was $78.9 million and adjusted operating income was $126.1 million in the first quarter. Operating income in the period a year before was $139.3 million.
“Our first quarter results were in-line with our expectations, and our team is executing well against our plans to make it easier for customers to bring their creativity to life,” said Chuck Rubin, Michaels chairman and CEO. “We continue to operate from a position of financial strength, as the industry leader with healthy operating margins, strong cash flows and high returns on invested capital, and we remain committed to leveraging these strengths to accelerate key initiatives in fiscal 2018 to drive future sales and earnings growth.”