Michaels Stores Q2 Earnings Up

Michaels Stores Inc. (MIK) said Wednesday its second-quarter net income rose about 15 percent as it sold more full-priced merchandise and expanded its operating margins.

The arts and crafts retailer said its net income for the quarter rose to $30.8 million, or 22 cents per share, from $26.7 million, or 19 cents per share, for the same quarter last year.

Wall Street analysts on average forecast earnings of 21 cents per share, according to Reuters Estimates.

Total sales for the quarter increased 9.2 percent to $745.5 million, while the company's sales at stores open at least a year, a key gauge known as same-store sales, rose 4.2 percent. Robust sales of jewelry and beading, paper-crafting, foam and yarn products boosted its performance, the company said.

Michaels Stores said it expects its third quarter same-store sales (search) to increase between 2 percent and 4 percent, pushing its operating income up between 15 percent and 20 percent. It forecast third-quarter earnings per share between 38 cents and 40 cents.

Looking ahead to the fourth quarter, the company said it expects its same-store sales to increase 4 percent to 6 percent and net earnings to rise between 20 percent and 25 percent.

In fiscal 2005, its same-store sales will rise between 4 percent and 6 percent and total sales will rise between 9 percent and 11 percent, the company said earnings per share for 2005 are expected to range from $1.85 to $1.90 per share, Michaels Stores said.