Craft store Michaels is reeling from a rough day on the market, suffering through its biggest single-day share price drop since its initial public offering (IPO) in 2014, according to news from The Financial Times.
The drop followed the retailer announcing a weaker than expected first quarter 2018 result, further announcing that lackluster times are still ahead.
All in, Michaels saw its share price flop 17.5 percent to $18.09 a share.
The Texas-based chain put up earnings of $0.39 in its fiscal first quarter, a beat on the $0.38 predicted by analysts ahead of the announcement — but not a big enough one to inspire confidence.
Meanwhile, net sales fell to $1.156 billion from $1.59 billion from this time a year ago. That fall-off in sales figures follows Michaels joining the ever-increasing march of retailers culling their physical footprint, as consumer shopping patterns are changing. Michaels closed 94 full-size Aaron Brothers farming stores and folded them into Michaels shops.
Comparable store sales, a key industry metric, marginally improved 0.4 percent.
“Our first-quarter results were in line with our expectations, and our team is executing well against our plans to make it easier for customers to bring their creativity to life,” said Chuck Rubin, chairman and chief executive.
The outlook for Q2, however, managed to chill any enthusiasm Michaels’ earnings might have generated. The retailer announced that it expects diluted earnings per share to come in between $0.12 and $0.14, which falls below the $0.19 expected by the Street. Comparable store sales are expected to be flat.
Overall, the store’s outlook on fiscal 2018 remains unchanged: The firm is predicting that diluted earnings per share will come in between $2.19 and $2.32, net sales between $5.22 billion and $5.29 billion and comparable store sales will pick up by 1.5 percent.
Michaels may have some headwinds to conquer on its path, and the retailer has seen its share price decline 25 percent over the last year, factoring into this week’s massive plunge.