With the coronavirus pandemic forcing temporary store closures, Michaels first quarter sales declined and the retailer posted a net loss, although omnichannel initiatives helped e-commerce sales grow.
Net sales for the first quarter ended May 2 were $799.9 million compared with $1.09 billion in the previous first quarter. Comparable store sales declined 27.6% compared to a 2.9% decline last year.
Net loss for the first quarter was $63.5 million compared to net income of $37.7 million in the previous first quarter. Diluted loss per share was $0.43 compared to diluted earnings per share of $0.24 in last year’s first quarter.
Ashley Buchanan, Michaels CEO, said, “During an unprecedented time, our teams quickly adapted and executed on key priorities for our business. While temporary store closures negatively impacted our first quarter results, I am proud of the way our team responded to changing market conditions, implementing safety and business continuity measures to protect the health of our associates while continuing to safely service the needs of our customers. This quarter, we significantly accelerated Michaels’ transformation into an omnichannel retailer by introducing a robust set of customer facing digital and fulfillment capabilities. As we reopen stores, we are encouraged by the trends we are seeing. Moving through the rest of the year, we will continue to introduce additional capabilities that enable us to serve customers wherever and however they want to shop. We believe these actions, along with our strong liquidity, will enable us to successfully navigate the current environment and emerge a healthier, stronger and better positioned omnichannel company.”
Michaels noted that it introduced new omnichannel capabilities including curbside pick-up and same day delivery, expanded ship from store and BOPIS and enabled in-app purchases; these actions helped drive 296% e-commerce growth in the first quarter, the company said.
As a result of restrictions related to COVID-19, fewer than 500 stores were open as of May 2, 2020. However, many closed stores continued to generate sales through curbside pickup and ship from store programs. As of June 4, 2020, the number of open and fully operational stores has increased to approximately 1,000 of the company’s 1,273 stores.