U.S. Markets close in 1 hr 9 mins
  • S&P 500

    3,395.14
    -5.83 (-0.17%)
     
  • Dow 30

    27,516.82
    -168.56 (-0.61%)
     
  • Nasdaq

    11,414.69
    +55.76 (+0.49%)
     
  • Russell 2000

    1,594.87
    -10.34 (-0.64%)
     
  • Crude Oil

    39.55
    +0.99 (+2.57%)
     
  • Gold

    1,911.10
    +5.40 (+0.28%)
     
  • Silver

    24.53
    +0.11 (+0.47%)
     
  • EUR/USD

    1.1825
    +0.0011 (+0.0946%)
     
  • 10-Yr Bond

    0.7760
    -0.0250 (-3.12%)
     
  • Vix

    32.66
    +0.20 (+0.62%)
     
  • GBP/USD

    1.3060
    +0.0039 (+0.3017%)
     
  • USD/JPY

    104.4550
    -0.3800 (-0.3625%)
     
  • BTC-USD

    13,611.81
    +504.58 (+3.85%)
     
  • CMC Crypto 200

    269.99
    +8.70 (+3.33%)
     
  • FTSE 100

    5,728.99
    -63.02 (-1.09%)
     
  • Nikkei 225

    23,485.80
    -8.54 (-0.04%)
     

Bear of the Day: The Michaels Companies (MIK)

Madeleine Johnson
·2 mins read

The Michaels Companies, Inc. (MIK) is a leading arts and crafts specialty retailer in North America. Customers can find a wide range of project materials, and its departments include floral, framing, home décor and seasonal merchandise. Along with its many private brands, Michaels has partnerships with Crayola, Elmer’s, and Cricut.

Q3 Earnings Disappoint Wall Street

Michaels’ third quarter came in weaker-than-expected on nearly all fronts, and shares closed down over 15% after results were released.

Adjusted earnings and revenue lagged behind the Zacks Consensus Estimate, and comparable-store sales fell 2.2% year-over-year. Total sales declined 4% and EPS was down 17% compared to the prior-year period.

Management pointed to challenging macroeconomic and industry trends as a reason for its underperformance, and has promised to place more emphasis on marketing, seasonal sales events, and inventory management strategies.

Analysts have turned bearish on Michaels, with twelve cutting estimates in the last 60 days for fiscal 2020

Earnings are expected to see double-digit negative growth for the year, and the Zacks Consensus Estimate has dropped 27 cents for that same time period from $2.38 to $2.11 per share.This sentiment has stretched into 2021, though sales and earnings growth could return to positive territory.

MIK is now a Zacks Rank #5 (Strong Sell).

 

The Michaels Companies, Inc. Price and Consensus
The Michaels Companies, Inc. Price and Consensus

 

Shares of the retailer are down almost 64% in the last one year. The S&P 500 is up 24.4% in comparison.

Going forward, Michaels is honing their target audience, choosing to focus on what they call Makers—craft enthusiasts who are willing to pay more for better quality products and services. The company also recently tapped former Walmart (WMT) executive Ashley Buchanan as its new CEO and president; Buchanan served as chief merchandising officer and chief operating officer for WMT’s e-commerce segment.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
The Michaels Companies, Inc. (MIK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research