Michaels Q1 earnings top Street; outlook disappoints

The Michaels Companies Inc. beat first-quarter profit expectations, but missed on same-store sales and provided a downbeat second-quarter outlook.

The arts and crafts retailer’s net income fell to $26.9 million, or 15 cents a share, for the quarter ended May 5, from $72.2 million, or 38 cents a share, in the year-ago period. Adjusted earnings per share came to 39 cents, just above analysts’ estimates 38 cents.

Revenue inched down to $1.156 billion from $1.159 billion, beating estimates of $1.151 billion. Same-store sales edged up 0.4%, less than expected, with an increase in the average amount of a transaction partially offset by a decrease in customer transactions.

The company said it expects second-quarter same-store sales to be about flat, compared with Street forecasts of a 0.7% rise.

It expects to see EPS in the range of $0.12 to $0.14, compared to estimates calling for $0.19 per share.

Michaels owns and operates more than 1,200 stores in 49 states and Canada under the Michaels, Aaron Brothers and Pat Catan’s banners.