Michaels Crafts Strong Q2

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.