IRVING, Texas-Weak sales and margins combined with higher expenses to cut 11.2 percent from Michaels’ first quarter net income, which totaled $47 million.
Net sales in the quarter, which ended on May 4, rose 1 percent to $993 million, but this included a drop in same-store sales of 0.7 percent, largely due to a 3 percent decrease in transactions. Gross margin was off 14 basis points to 41 percent. Selling, general and administrative expenses headed upward both in dollars (4.2 percent) and as a percentage of sales—71 basis points to finish the quarter at 27.3 percent.
During the quarter, the company opened 15 Michaels stores, relocated four and closed one. It also closed three Aaron Brothers stores.