- Same-Store Sales Increase 6% -
- Expects 2003 EPS to Increase 27% -
IRVING, Texas, Feb. 5 /PRNewswire-FirstCall/ -- Michaels Stores, Inc.
(NYSE: MIK) reported today that total sales for the month of January were
$217.7 million, a 12% increase over last year's $195.2 million. The Company's
same-store sales for the month increased 6%. Total sales for the fourth
quarter were $1.063 billion, a 9% increase over last year's $972.0 million,
and its same-store sales for the fourth quarter increased 4%. Total sales for
2003 were $3.091 billion, an 8% increase over last year's $2.856 billion, and
same-store sales were up 2% for the year.
For the month, customer traffic increased 4%, average ticket increased 3%,
and custom frame deliveries decreased 1%. For the quarter, customer traffic
increased 1% and average ticket increased 3%. Year-to-date, both customer
traffic and average ticket increased 1%. Favorable currency translations, due
to the stronger Canadian dollar, contributed approximately 0.8% to the average
ticket increase for the month, quarter, and year.
Michael Rouleau, Chief Executive Officer, said, "We are very pleased with
our strong sales performance, particularly in light of the adverse weather
conditions that struck many of our key markets in January. Our best
performing regions for the month were the Pacific, Southeast, and Northeast.
For the month, the most significant contributors to our overall same-store
sales growth were our Scrapbooking, Yarn, Framing, Candles, and Books
categories."
Rouleau added, "In addition to strong sales performance in the quarter, we
also completed the critical first phase of our Perpetual Inventory and
Automated Replenishment project. As of February 2nd, all of our Michaels
stores are on the Perpetual Inventory system. The implementation of this
system has proceeded well and helped us improve to a 94% in-stock level in our
stores during the critical holiday selling season, a significant improvement
over last year. Approximately 45% of our basic replenishable items are
currently on Automated Replenishment and we remain on track to complete the
second phase of this project by mid-2004. These system implementations are
the most important initiatives we have ever undertaken and will dramatically
improve our inventory management, our store execution, and our supply chain
operations. This successful implementation is now enabling us to move our
focus from operational issues to merchandising and marketing opportunities
which should further drive top line sales growth."
Rouleau continued, "I'm also pleased to announce that as we continue to
evolve as a company, our financial results continue to benefit from this
evolution. Fiscal 2003 will mark our seventh straight year of record sales
and earnings. We currently forecast fourth quarter diluted earnings per share
to range from $1.30 to $1.34, an increase of approximately 23% over last year,
driven by our strong same-store sales results, operating margin expansion of
approximately 100 basis points, and a lower effective tax rate. Fiscal 2003
full year diluted earnings per share are currently expected to range from
$2.50 to $2.54, an increase of approximately 27% over our reported fiscal 2002
diluted EPS of $1.99 and 21% above last year's diluted EPS before the
cumulative effect of our accounting change of $2.09."
He concluded, "As we look ahead to fiscal 2004, we expect our momentum to
continue as we complete the implementation of our Automated Replenishment
system, continue to improve our operations, and refine our merchandising and
marketing efforts. We expect diluted earnings per share to increase at least
15%, driven by a 3% to 5% same-store sale increase and continued expansion of
operating margins by approximately 50 basis points. Included in our 2004 plan
are incremental pre-tax costs totaling approximately $12 million for three
strategic actions: the replacement of our Lexington distribution center, the
move of our Aaron Brothers headquarters to Dallas, and incremental store
closing costs due to a higher level of store relocations."
The Company plans to release its February 2004 sales and its Fourth
Quarter and Fiscal Year 2003 earnings results on Wednesday, March 3, 2004, and
will host a conference call at 4:00 p.m. CT on that date to discuss them.
Those who wish to participate in the call may do so by dialing 973-633-6740.
Any interested party will also have the opportunity to access the call via the
Internet at http://www.michaels.com . To listen to the live call, please go to the
website at least fifteen minutes early to register and download any necessary
audio software. For those who cannot listen to the live broadcast, a replay
will be available for 30 days after the date of the event. Replay may be
accessed at http://www.michaels.com or by phone at 973-341-3080, PIN 4100059.
Michaels Stores, Inc. is the world's largest retailer of arts, crafts,
framing, floral, wall decor, and seasonal merchandise for the hobbyist and
do-it-yourself home decorator. The Company owns and operates 808 Michaels
stores in 48 states and Canada, 158 Aaron Brothers stores, located primarily
on the West Coast, two ReCollections stores in the Dallas/Fort Worth
Metroplex, and two wholesale operations.
Certain statements contained herein which are not historical facts are
forward looking statements that involve risks and uncertainties, including,
but not limited to, estimation risks, customer demand and trends in the arts
and crafts industry, related inventory risks due to shifts in customer demand,
the effect of economic conditions, the impact of competitors' locations or
pricing, the availability of acceptable locations for new stores, difficulties
with respect to new information system technologies, supply constraints or
difficulties, the results of financing efforts, the effectiveness of
advertising strategies and other risks detailed in the Company's Securities
and Exchange Commission filings. The Company intends these forward-looking
statements to speak only as of the time of this release and does not undertake
to update or revise them as more information becomes available.
This press release is also available on the Michaels Stores, Inc. website
(http://www.michaels.com ).
SOURCE Michaels Stores, Inc.
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Related links:
http://www.michaels.com
Company News On-Call:
http://www.prnewswire.com/comp/115769.html
CONTACT:
Jeffrey N. Boyer, Executive Vice President -
Chief Financial Officer, +1-972-409-1581, or Christopher J.
Holland, Vice President - Finance, +1-972-409-1667, both of
Michaels Stores, Inc.
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