The Michaels Cos. delivered a better-than-expected third-quarter performance, driven by strong demand in its stores and online, where sales jumped 128%.
“We have strengthened our core business and put Michaels in a much stronger position today – operationally, financially and strategically – than at the start of this year and I would like to express my gratitude to each member of the team. Michaels whose hard work has made these results possible,” said Ashley Buchanan, CEO of Michaels.
The arts and crafts retailer said it would pay out approximately $10 million in one-time vacation bonuses to full-time and part-time employees in recognition of “their extraordinary work this year at unprecedented times.”
Michaels net income totaled $111.1 million, or $0.74 per share, for the quarter ended Oct. 31, compared to $28.7 million, or $0.19 per share, for the same period of the previous year. Adjusted earnings per share were $0.86, beating analysts’ expectation of $0.59 per share.
Sales rose 15.1% to $1.406 billion, also more than expected. Same-store sales increased by 16.3%, with strong demand both in stores and in e-commerce.
E-commerce sales grew 128%, driven by improved omnichannel capabilities including curbside pickup, same-day delivery, ship-from-store, online shopping, in-store pickup, in-app purchases, etc. Year-to-date, e-commerce growth has totaled 249%.
“Michaels delivered strong third quarter results, highlighted by comparable store sales growth of 16.3%, which was driven by strong consumer demand, improved retail execution and progress. on our strategic initiatives,” Buchanan said. “Our expanded omnichannel capabilities, creator-centric branding, and increasingly personalized marketing have been well received by customers.”
Buchanan said the company has also benefited from the progress of continued efforts in strategic inventory management, streamlining store operations and a disciplined approach to pricing and promotions.
“Importantly, we strengthened our balance sheet by retiring $150 million of debt and increased our financial flexibility by refinancing and significantly extending the term of our term loan,” she said.