Thank you for sharing!

Your article was successfully shared with the contacts you provided.

IRVING, TX-Demand for jewelry and beading products,along with paper-crafting items and yarn, helped topush Michaels Stores Inc.’s net income to $30.8million, a 15.2% increase compared to the $26.7million during the same quarter last year. Dilutedearnings per share increased 15.8% for the quarterto 22 cents versus 19 cents in the second quarter of 2004.

The strong performance encouraged the chain’s CEOMichael Rouleau to say that he expects fiscal 2005 tobe Michaels’ ninth straight year of record profit.

During the second quarter, Michaels’ same-store salesgrew by 4.2% over the same period last year, whiletotal sales increased 9.2% to $745.5 million from$682.9 million. The chain experienced a 2.4% increasein average ticket and a 1.4% increase in transactions,and the chain’s margins improved by more than 140basis points to 8.4% of sales. As a result, operatingincome increased 32.2% to a second quarter record of$62.8 million.

For the third quarter, the chain is forecastingsame-store sales growth of 2% to 4%. Diluted earningsper share of 38 cents to 40 cents is anticipated, anincrease over the 31 cents posted in the third quarterof 2004.

The chain, which operates 872 Michaels stores, 165Aaron Brothers stores, 11 Recollections stores andfour Star Wholesale operations, plans to strengthenits advertising and expand its staff during the secondhalf of the year, said Jeffrey Boyer, vice presidentand CFO, during Michaels’ earnings call.

During the second half of 2005, Michaels also plansto begin piloting its new hybrid distribution method,which it has been working on for three years, Rouleausaid during the call. The new method allowsall of Michael’s vendors to deliver products to thechain’s five distribution centers rather than shipdirectly to stores.

Hybrid distribution is expected to reduce expenses forboth Michaels and its vendors, according to Rouleau.”We’re going to approach this project carefully and methodically,” he said, adding that the chain will be fully transitioned to the new system by 2008.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.