Michaels Companies Q3 Profit Increases; Sees Q4 EPS In Line With View

(RTTNews) - The Michaels Companies Inc. (MIK) reported that its net income increased 19.9% to $76.8 million in the third quarter of fiscal 2015 compared to $64.1 million in the same quarter last year. Earnings per share increased 19.4% to $0.37 from $0.31 in the third quarter of fiscal 2014.

Net sales increased by 3.4%, or 5.1% on a constant currency basis, to $1.2 billion from $1.1 billion in the third quarter of fiscal 2014 and comparable store sales increased by 1.5% or 3.1% on a constant currency basis.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.36 per share and revenues of $1.17 billion for the third-quarter. Analysts' estimates typically exclude special items.

Looking ahead for the fourth quarter, the company expects comparable store sales growth of 0.5% to 1.5% or 1.9% to 2.9% on a constant currency basis, operating income of $308 to $319 million and earnings per share of $0.82 to $0.85. Analysts project fourth-quarter earnings of $0.85 per share.

The company expects earnings per share of $1.68 to $1.71 for full year fiscal 2015. Analysts expect annual earnings of $1.71 per share. This guidance includes the opening of one more Michaels store in the last quarter of fiscal 2015. It assumes total annual net sales growth of 2.9% to 3.2% or 4.3% to 4.6% on a constant currency basis, comparable store sales growth of 0.9% to 1.2%, or 2.3% to 2.6% on a constant currency basis and operating income of $704 to $715 million.

The currency impact of the weaker Canadian dollar in the first three quarters of the year negatively impacted sales by approximately $45 million and diluted earnings per share by $0.06 including both translation and cost of goods sold impacts which were higher than previously anticipated. This updated full year outlook reflects current market conditions and assumes a $69 million sales headwind and an approximate $0.09 to $0.10 diluted earnings per share reduction from the exchange rate translations and cost of goods sold impact.