=Michaels Stores (MIK) reported earnings on Thur 22 March 18 (b/o)

Michaels Stores beats by $0.01, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY19 EPS below consensus, revs below consensus 

• Reports Q4 (Jan) earnings of $1.19 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $1.18; revenues rose 8.0% year/year to $1.89 bln vs the $1.88 bln Capital IQ Consensus.
  • Comparable store sales increased 2.5%
• Co issues downside guidance for Q1, sees EPS of $0.36-0.38 vs. $0.46 Capital IQ Consensus Estimate; sees Q1 revs of $1.14-1.15 bln vs. $1.18 bln Capital IQ Consensus Estimate.
• Co issues downside guidance for FY19, sees EPS of $2.19-2.32 vs. $2.59 Capital IQ Consensus Estimate; sees FY19 revs of $5.22-5.29 bln vs. $5.37 bln Capital IQ Consensus Estimate.
• Aaron Brothers Store Closings
  • The Company has completed its strategic review of Aaron Brothers, a small, specialty retail chain primarily focused on custom framing, ready-made frames, wall art and art supplies. In 2018, the Company plans to close 94 full-size Aaron Brothers stores and reposition Aaron Brothers as a "store-within-a-store," providing custom framing services in all Michaels stores. The Company will also rebrand Framerspointe.com, a company-owned online custom framing website, as AaronBrothers.com.
  • In fiscal 2017, Aaron Brothers net sales totaled approximately $110 million and had no material impact on the Company's operating income. The Company expects the after-tax cost of implementing these changes will be in the range of $37 million to $42 million. The Company anticipates the vast majority of the cost will be recognized in the first quarter of fiscal 2018. The Company expects the after-tax cash impact of the changes to be minimal.