Why Michaels Companies, Inc. Stock Jumped Today
Image source: Michaels Companies.
What:Shares of Michaels Companies were up 10.6% as of 2:40 p.m. EST Thursday after the arts and crafts retailer announced better-than-expected fiscal fourth-quarter 2015 results.
So what:Quarterly revenue climbed 4.6% year over year, to $1.68 billion, helped by a 3.1% increase in comparable-store sales -- up 4.7% at constant currency. That translated to 17.3% growth in net income, to $183.7 million, and a 16% increase in net income per share, to $0.87. By comparison, analysts' consensus estimates predicted earnings of $0.84 per share on revenue of $1.65 billion.
Michael CEO Chuck Rubin elaborated:
Now what:For its fiscal first-quarter 2016, Michaels anticipates comparable-store sales growth of 1.9% to 2.4% (2.8% to 3.3% at constant currency), and diluted earnings per share of $0.34 to $0.36. By comparison, analysts were predicting earnings of $0.38 per share.
For the full fiscal-year 2016, however, Michaels expects comparable-store sales growth of 2.2% to 2.7% (2.8% to 3.3% at constant currency), total net sales growth of 8% to 9% (8.6% to 9.6% at constant currency), and diluted earnings per share between $1.88 and $1.96. Note the bottom line of this guidance includes the impact of both unfavorable Canadian exchange rates, and $10 million to $12 million in integration costs related to its recently announced acquisition of Lamrite West.
The top line also includes $225 million to $250 million in revenue from Lamrite. Analysts, on average, were anticipating fiscal 2016 revenue would grow a modest 4% year over year, to $5.11 billion, and result in earnings right in the middle of Michaels' guidance at $1.92 per share.
In the end, given Michaels' relative outperformance in Q4 and its solid full-year guidance, its no surprise to see investors celebrating these results today.
The article Why Michaels Companies, Inc. Stock Jumped Today originally appeared on Fool.com.
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