Despite coronavirus-associated challenges, Michaels managed to have a better-than-expected second quarter.
The company posted a net loss of $7.8 million, or five cents per diluted share, versus net income of $24.5 million, or 16 cents per diluted share, in the year-before quarter. Adjusted for one-time events, the second quarter generated net income of $44.7 million, or 30 cents per diluted share versus $29.6 million, or 19 cents per diluted share, in the period a year previous.
Adjusted diluted earnings per share topped a MarketBeat-published analyst consensus estimate that looked for a loss of eight cents.
Comparable sales advanced 12% in the quarter year over year. Net sales were $1.15 billion versus $1.03 billion in the year-earlier period. Operating income was $53.3 million versus $71.3 million in the 2019 quarter.
Michaels pointed out that all its stores had reopened by the beginning of July. Strong demand in both open stores and e-commerce drove the comp gain. In the second quarter, Michael’s e-commerce sales grew by about 350% year over year driven by enhanced and expanded omnichannel capabilities including curbside pick-up, same day delivery, ship from store, BOPIS and in-app purchases.
Ashley Buchanan, Michaels CEO said, “Michaels strong second quarter results are a testament to the solid execution of our team in an unprecedented environment. We saw strong demand and customer engagement across our stores, and the multiple omnichannel touchpoints we introduced over the past few months. Looking ahead, we will continue to focus on serving our customers and executing to the pillars that underpin our maker strategy: strengthening our retail foundation, modernizing our omnichannel experience and establishing our position as the Expert for the Maker.”
Buchanan added that Michaels’ “strong performance combined with proactive cash management actions taken earlier this year resulted in outstanding quarterly free cash flow generation. We ended the second quarter in a strong liquidity position of $1.3 billion, approximately $100 million higher than at the start of the fiscal year. This gives us great confidence in our ability to navigate the current environment while advancing our strategic priorities and positioning Michaels for long-term growth.”