Shares of arts and crafts retailer Michaels (NASDAQ: MIK) jumped 15% on Tuesday morning as investors decided to focus on better-than-expected quarterly results over guidance that was a bit lighter than anticipated.
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Michaels reported adjusted fiscal fourth-quarter earnings of $1.44 per share on revenue of $1.79 billion, beating expectations for $1.42 per share in earnings on sales of $1.78 billion. But the company also said it expects adjusted first-quarter earnings of between $0.28 and $0.33 per share, below the $0.40-per-share consensus, on same-store sales down in the low single-digit range.
For the full fiscal year, the company sees adjusted earnings per share of $2.34 to $2.46 on sales of $5.19 billion to $5.24 billion, shy of expectations for $2.48 per share in earnings on revenue of $5.26 billion.
Interim CEO Mark Cosby, who stepped in late last month after Chuck Rubin agreed to transition out of his role as CEO, said, "I am excited about the long-term opportunities we have to engage with makers of all experience levels and expand our leadership position within the arts and crafts retail industry."
Michaels, like many retailers, has had a rough go of it in recent years. Even after Tuesday's stock surge, it remains down 40% over the past year. In theory, the company's products are more hands-on and hopefully less vulnerable to attack from Amazon.com and other e-commerce sites, but a lack of a hot arts and crafts trend has weighed on the business. A disappointing acquisition has hurt as well.
The fourth-quarter results, at least for the time being, seem to have restored some of the optimism surrounding the company.
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