Michaels Cos. (MIK) Tops Q2 EPS by 38c, Revenues Beat

Michaels Cos. (NASDAQ: MIK) reported Q2 EPS of $0.30, $0.38 better than the analyst estimate of ($0.08). Revenue for the quarter came in at $1.15 billion versus the consensus estimate of $1.01 billion.

• Net Sales increase of 11.1% to $1.148 billion; Comparable Store Sales increase of 12.0%; including e-commerce growth of 353.1%
• Operating Income $53.3 million, Adjusted Operating Income increase of 40.7% to $105.8 million
• Free Cash Flow of $331 million, liquidity of approximately $1.3 billion, inclusive of $651 million in cash
• Michaels to hold virtual investor day on September 24, 2020

Ashley Buchanan, Michaels Chief Executive Officer commented, “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.”

Mr. Buchanan added, “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. We look forward to sharing more details about our future direction and long-term expectations at our upcoming investor day later this month.”

CEO Comments

Mark Clouse, Campbell’s President and CEO, stated, “Our strong fourth-quarter and full-year fiscal 2020 performance was enabled by the extraordinary work of our teams who remained agile and resilient in a challenging operating environment. We continued to invest in our businesses during the quarter as we experienced unprecedented demand for our products and welcomed millions of new households to the Campbell portfolio. This quarter concluded a year that furthered our strategic plan and solidified a significantly strengthened foundation that we will build upon going forward as we begin fiscal 2021."

Outlook:

Given the continued uncertainty due to the COVID-19 pandemic, including a dynamic and uncertain outlook for consumer spending patterns and associated government policies, the Company is not providing any additional financial outlook information at this time.

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

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