initial public offerings (IPOs) trading on American exchanges

Friday, March 18, 2016

Michaels Stores (MIK) reported earnings Thur 17 March 2016 (b/o)

** charts after earnings **

 Michaels Stores beats by $0.03, beats on revs; guides Q1 EPS below consensus; guides FY17 EPS in-line; announces $200 mln buyback :
  • Reports Q4 (Jan) earnings of $0.87 per share, $0.03 better than the Capital IQ Consensus of $0.84; revenues rose 4.6% year/year to $1.68 bln vs the $1.65 bln Capital IQ Consensus.
    • Comparable store sales increased 3.1%, or 4.7% on a constant currency basis.
    • As a percent of sales, gross profit decreased 30 basis points to 40.9% compared to 41.2% in the fourth quarter of fiscal 2014. The decline was driven by clearance activity as part of ongoing department resets; the negative impact of foreign exchange rates; a shift in sales mix; and investments to improve the in-store environment. The decrease was partially offset by improved sourcing and pricing efficiencies. 
  • Co issues downside guidance for Q1, sees EPS of $0.34-0.36 vs. $0.38 Capital IQ Consensus; comps +1.9-2.4%.
  • Co issues in-line guidance for FY17, sees EPS of $1.88-1.96 vs. $1.92 Capital IQ Consensus; total sales including Lamrite West +8-9%; comps +2.2-2.7%. 
  • The Company expects that the integration of Lamrite West will create near-term pressure on operating margin in fiscal 2016, reflecting the timing of profit recognition of the product Michaels procures through Lamrite West; the incorporation of the wholesale business, which has a lower gross margin rate than the Michaels business; and additional investments needed to integrate and enhance combined capabilities.
  • Board of Directors has authorized the Company to purchase, from time to time, as market conditions warrant, $200 million of the Company's common stock.

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