IRVING, Texas-Increased sales, improved gross margin and a significant reduction in interest expense bolstered Michaels’ bottom line in its fiscal third quarter ending on Nov. 2.
Net income for the arts and craft specialty retailer totaled $58 million, up 65.7 percent as net sales gained 10.3 percent to finish the quarter at $1.1 billion. The sales pickup included a 7.9 percent increase in same-store sales.
Gross margin was up 88 basis points to 40.5 percent. Interest expense was slimmed by 25 percent. Selling, general and administrative expenses somewhat offset these positives by increasing 11.6 percent in dollars and 32 basis points as a percentage of sales, to 27.6 percent.
During the quarter, the company opened 19 Michaels stores, relocated six and closed one. At the end of the quarter, it operated 33 net new Michaels and Aaron Brothers stores. Its store count now totals 1,259 stores, including 1,137 Michaels stores and 122 Aaron Brothers stores.