Michaels Companies, Inc. (NASDAQ:MIK ) early Tuesday [Mar 7, 2017 | 7:10am ] posted solid fourth quarter earnings results and offered an upbeat forecast for 2017, as its lagging comps are seen recovering in the latter part of the year.
Written by StockNews.com
The Irving, TX-based arts & crafts store operator reported adjusted Q4 earnings per share (EPS) of $0.96, which was $0.01 better than the Wall Street consensus estimate of $0.95.
Revenues rose 4.1% from last year to $1.75 billion, roughly in-line with analysts’ $1.76 billion view.
On a sour note, Michael’s said that comparable store sales (“comps”) fell 1.0% in the latest period, hurt by lower transaction volume. Comps are considered a key indicator of a retailer’s health, since they only measure the year-over-year sales performance of stores open at least 12 months.
Gross profit also slipped to 40.3% in the fourth quarter, from 40.9% in the year-ago period.
Looking ahead, MIK forecast Q1 EPS to range from $0.38 to $0.40, which is right in-line with analysts’ $0.39 estimate. First quarter comps are expected to be flat to down 1%.
For the full year 2017, Michael’s outlook was much rosier. It sees 2017 EPS of $2.05 to $2.17, which is well above Wall Street’s current view of $2.04. Full-year comps are expected to be flat to up 1.5%.
The company commented on its business progress via press release:
“Today, we reported fourth quarter results within our initial guidance, and I am encouraged that we delivered market share gains and increased earnings,” said Chuck Rubin, Chairman and Chief Executive Officer. “Looking back on the year, I am pleased we increased our free cash flow to $450 million and utilized the strength of our balance sheet to deliver value to our shareholders. Importantly, we made progress against each of the priorities of our Vision 2020 strategy, which is our long-term strategy to increase market share and drive shareholder return.”
