Michaels Stores beats by $0.03, beats on revs; guides Q3 EPS in-line; raises FY18 guidance
- Reports Q2 (Jul) earnings of $0.19 per share, $0.03 better thanthe Capital IQ Consensus of $0.16; revenues rose 1.2% year/year to $1.07 bln vs the $1.06 bln Capital IQ Consensus.
- Comparable store sales +0.6% vs. -0.5 to -1.5% guidance, or 0.8% on a constant currency basis, driven by an increase in customer transactions, which was partially offset by a decline in average ticket.
- As a percentage of net sales, gross profit increased 70 basis points to 37.5% compared to 36.8% in the second quarter of fiscal 2016. The increase, as a percentage of net sales, was due to higher merchandise margin and distribution-related costs. These benefits were partially offset by higher inventory shrinkage and a $1.4 million benefit associated with net non-recurring, inventory-related purchase accounting adjustments in the second quarter of fiscal 2016 related to the acquisition of Lamrite West.
- Co issues in-line guidance for Q3, sees EPS of $0.41-0.43 vs. $0.42 Capital IQ Consensus Estimate; comps +1.2-2.2%
- Co issues upside guidancefor FY18, sees EPS of $2.11-2.16 vs. $2.08 Capital IQ Consensus Estimate; raises sales to +2.8-3.8% from +2.2-3.7%; raises comps to +0.5-1.5% from +0.2-1.3%.
- "Our efforts to create a more experiential, omnichannel shopping experience, improve our value perception, and leverage our customer analytics are gaining traction earlier than we initially expected. As we begin the second half of the year, we believe these efforts will continue to deliver profitable growth and enable us to further expand our leadership in the arts and crafts channel."
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