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February 05, 2016 7:33 PM ET

Specialty Retail

Company Overview of Michaels Stores, Inc.

Company Overview

Michaels Stores, Inc. operates as an arts and crafts specialty retailer in North America. Its stores offer arts, crafts, framing, floral, home décor, and seasonal merchandise for the hobbyists and do-it-yourself home decorators. The company also provides photo frames, ready-made frames, art prints, framed arts, art supplies, and custom framing services. As of August 1, 2015, it owned and operated 1,186 Michaels stores in the 49 states of the United States, as well as in Canada; and 118 Aaron Brothers stores. In addition, Michaels Stores, Inc. produces private brands, including Recollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, Art Minds, Artist's Loft, Craft Smart,...

8000 Bent Branch Drive

Irving, TX 75063

United States

Founded in 1962

12,000 Employees

Phone:

972-409-1300

Key Executives for Michaels Stores, Inc.

Chairman of the Board, Chief Executive Officer and Member of Nominating & Corporate Governance Committee
Age: 55
Chief Financial Officer and Chief Administrative Officer
Age: 61
Executive Vice President of Supply Chain
Age: 60
Executive Vice President of Merchandising
Age: 56
Executive Vice President, General Counsel and Secretary
Age: 58
Compensation as of Fiscal Year 2015.

Michaels Stores, Inc. Key Developments

Michaels Stores, Inc. Announces Unaudited Consolidated Earnings Results for Third Quarter and Nine Months Ended October 31, 2015 ; Provides Earnings Guidance for the Fourth Quarter and Full Year of Fiscal 2015

Michaels Stores, Inc. announced unaudited consolidated earnings results for third quarter and nine months ended October 31, 2015. For the quarter, the company reported net sales of $1,168,423,000, operating income of $155,852,000, income before income taxes of $121,900,000, net income of $76,797,000 or $0.37 per diluted share, net cash provided by operating activities of $94,638,000, adjusted EBITDA of $191,112,000 compared to the net sales of $1,130,195,000, operating income of $142,479,000, income before income taxes of $100,225,000, net income of $64,064,000 or $0.31 per diluted share, net cash provided by operating activities of $161,238,000, adjusted EBITDA of $180,600,000 for the same quarter a year ago. For the nine months, the company reported net sales of $3,230,293,000, operating income of $396,416,000, income before income taxes of $284,206,000, net income of $179,246,000 or $0.85 per diluted share, net cash provided by operating activities of $7,493,000, additions to property and equipment of $89,726,000, adjusted EBITDA of $502,002,000 compared to the net sales of $3,130,393,000, operating income of $332,571,000, income before income taxes of $104,821,000, net income of $60,835,000 or $0.32 per diluted share, net cash provided by operating activities of $36,502,000, additions to property and equipment of $104,724,000, adjusted EBITDA of $481,449,000 for the same period a year ago. The Company expected diluted earnings per share of $1.68 to $1.71 for full year fiscal 2015. This guidance includes the opening of one more Michaels store in the last quarter of fiscal 2015. It assumes total annual net sales growth of 2.9% to 3.2% or 4.3% to 4.6% on a constant currency basis, comparable store sales growth of 0.9% to 1.2%, or 2.3% to 2.6% on a constant currency basis and operating income of $704 to $715 million. The effective tax rate is expected to be approximately 36.9%. This full year outlook implies fourth quarter comparable store sales growth of 0.5% to 1.5% or 1.9% to 2.9% on a constant currency basis, operating income of $308 to $319 million and diluted earnings per share of $0.82 to $0.85.

The U.S. Department of Justice and the Consumer Product Safety Commission Files Suit against Michaels Stores Inc. and Michaels Stores Procurement Co. Inc. On Shattering Glass Vases

The U.S. Department of Justice and the Consumer Product Safety Commission jointly announced the filing of a complaint against Michaels Stores Inc. and its subsidiary Michaels Stores Procurement Co. Inc. in the U.S. District Court for the Northern District of Texas. The complaint charges that Michaels knowingly violated the reporting requirements of the Consumer Product Safety Act with respect to glass vases that shattered in consumers' hands, sometimes as the consumer lifted the vase from the Michaels Stores shelf. As in the complaint, Michaels imported and sold the vases, which caused serious injuries to consumers, including lacerations requiring stitches, permanent nerve damage and surgery to repair severed tendons. The complaint, filed by the Department of Justice on behalf of the CPSC, seeks civil penalties and permanent injunctive relief. In addition to failing to notify the CPSC 'immediately' as required by law, the government also alleges that when Michaels finally notified the CPSC, it did so in a misleading way. Michaels' report conveyed the false impression that Michaels did not import the vases, even though Michaels should have known it was the importer. The complaint asserts that Michaels' misrepresentation allowed Michaels to avoid legal responsibility for the recall of the vases as well as any obligation to pay costs and expenses associated with a recall. Michaels sold the vases in its stores from 2006 to 2010. According to the complaint, the vases pose a safety hazard because their walls are too thin to withstand the pressure of normal handling and, as a result, they shatter in consumers' hands. The complaint alleges that beginning as early as November 2007 and continuing for more than two years, Michaels received numerous consumer complaints that the vases were unsafe because they shattered during normal use and caused serious injuries. The vases were recalled in September 2010. The matter is being handled by Trial Attorney Kerala Thie Cowart of the Civil Division's Consumer Protection Branch, Assistant U.S. Attorney Lisa Hasday of the Northern District of Texas and Patricia Vieira of the CPSC's Office of the General Counsel.

Glancy Binkow & Goldberg Announce Class Action Lawsuit Against Michaels Stores Concerning Employee Background Checks

Glancy Binkow & Goldberg LLP has filed a class-action lawsuit against Michaels Stores concerning the manner in which it performs employee background checks. The action is currently pending in the United States District Court for the Western District of Missouri, Raini Burnside v. Michaels Stores, Inc., Case No. 6:15-cv-03010-MDH (filed January 9, 2015). The Burnside case alleges that Michaels violated the Fair Credit Reporting Act (FCRA) by conducting background checks on thousands of prospective and current employees without properly disclosing that a check would be performed. An employer who fails to comply with the FCRA may be liable to the employee or job applicant for any actual damages or statutory damages of $100 to $1,000 per violation.

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