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Michaels Reports Financial Results
Posted by: BillGardner | March 19, 2008
Michaels Stores reported total sales for the fourth quarter were $1.301 billion, a 4.4 percent decrease from fiscal 2006 fourth quarter sales of $1.361 billion, which was a 14-week quarter. The decrease in net sales was primarily driven by a decrease in same-store sales of 3.4 percent and the absence of sales totaling $59 million for the extra week reported in fiscal 2006, offset by sales from new stores. Total sales for the year were $3.862 billion, an increase of 0.5 percent from $3.843 billion for the same period last year, which included the extra week. Same-store sales for the year decreased 0.7 percent. Brian Cornell, ceo, said, “Sales performance in the fourth quarter was below the company’s expectations as customer traffic was softer than planned and Christmas and holiday categories underperformed. While discretionary spending was down significantly on higher ticket, seasonal items, we experienced solid performance in many of our core business lines. “In the face of a challenging fourth quarter sales environment, we continued to operate prudently. Through aggressive efforts across the company, we were able to control costs, reduce our average store inventory levels and strengthen our financial position, with a reduction in our debt level of approximately $100 million since last year and nearly $400 million since our peak post-closing level.” He concluded, “Most importantly, we continued to make significant progress on our key strategic initiatives, particularly the global sourcing and consumer insights programs. As a result, we are confident in our approach to drive long-term profitable growth as we capitalize on significant margin enhancement opportunities and begin to transition into a more consumer focused organization.” During fiscal 2007, the company opened 45 new stores, relocated 11 stores, and closed three stores under the Michaels banner and also opened two and closed two Aaron Brothers stores. In addition, the company closed its 11 Recollections and three Star Decorators’ Wholesale locations, and 11 data relating to prior years have been adjusted to reflect the discontinued operations of these two concept businesses.
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