The Michaels Companies (MIK) Tops Q2 EPS by 7c, Sales Beat

The Michaels Companies (NASDAQ: MIK) reported Q2 EPS of $0.15, $0.07 better than the analyst estimate of $0.08. Revenue for the quarter came in at $948 million versus the consensus estimate of $943 million. Comparable store sales increased by 3.2% or 3.6% on a constant currency basis.

The Michaels Companies expects adjusted earnings per share of $0.98 to $1.02 for the second half of fiscal 2014 and $1.38 to $1.42 for full year fiscal 2014. This guidance is based on opening 21 Michaels stores in the second half of fiscal 2014, total annual sales growth of 1% to 2% and adjusted operating income of $636 to $649 million for 2014. Operating income for the second half of the year is anticipated to be $408 million to $421 million. Annual adjusted interest expense is forecasted to be $176 million which includes $42 million per quarter for the second half of the year. The effective tax rate is expected to be approximately 37.5% for the second half of fiscal 2014 and approximately 38% for the full fiscal year 2014. The adjusted diluted weighted average shares for calculating the adjusted earnings per share are anticipated to be 207 million for the full year fiscal 2014.

Chuck Rubin, Chief Executive Officer, stated, "We are very pleased to build on our solid start to fiscal 2014 with another quarter of strong performance. Broad-based sales strength was accompanied by healthy margins and our characteristic expense discipline, even as we invested in our strategic initiatives."

"We are in the implementation phase of our multi-year strategic plan which is designed to not only improve the experience of our core enthusiast shopper but also to attract the under-served novice customer to Michaels, enabling us to further extend our leadership position within the fragmented arts and crafts industry," Mr. Rubin continued.

Mr. Rubin concluded, "We enter the back half of 2014 confident in our business, our outlook and our initiatives. While we will be lapping the huge success of Rainbow Loom, the Michaels' team is enthusiastic, energized and aligned on our priorities to serving our customers and maximizing our sales and margin performance."

For earnings history and earnings-related data on The Michaels Companies (MIK) click here.

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