Arts and crafts retailer The Michaels Companies (NASDAQ:MIK) reported second-quarter results on Thursday morning, and investors welcomed the business update with open arms. Shares jumped as much as 23.6% higher before settling down to a more modest 12.3% gain as of 12:22 p.m. EDT.
In the second quarter, Michaels saw sales rise 1% year over year to $1.07 billion. Adjusted earnings increased by 12%, landing at $0.19 per diluted share. Analysts would have settled for earnings of $0.16 per share on sales of $1.06 billion. The store network expanded by a net 10 new locations compared to the year-ago period, and comparable-store sales increased by 0.6%.
Looking ahead, Michaels CEO Chuck Rubin noted that the second half of 2016 included some unique challenges that should make for easier year-over-year comparisons in the next couple of quarters. Net sales for the full fiscal year should rise by approximately 3.3%
"Our efforts to create a more experiential, omnichannel shopping experience, improve our value perception, and leverage our customer analytics are gaining traction earlier than we initially expected," Rubin said in a prepared statement.
This report was a refreshing reversal from the disappointing results Michaels posted in the first quarter, and the company exceeded its own gloomy same-store sales projections. The stock has a long way to go before reaching back to the $30 share prices it posted in the early summer of 2016, but this report gave investors a few credible reasons to hope for the best.