The Michaels Companies (NASDAQ:MIK) stock outperformed a surging market in November. Shareholders gained 21% compared to the 11% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally put the retailer back in solidly positive territory for the year, although it mostly erased losses from the prior month.
Investors' outlook about the COVID-19 pandemic brightened significantly last month, and that boost had a significant impact on Michaels stock, which had attracted many bearish bets earlier in the year. The share price bounce also reflected hopes that the specialty retailer might announce strong third-quarter operating results in early December while forecasting continued gains over the critical holiday shopping season.
Michaels' third-quarter report did indeed reveal improving trends, with comparable-store sales jumping 16% after having risen 12% in the prior quarter. Investors celebrated that news, along with signs of elevated profitability.
CEO Ashley Buchanan and her team declined to issue a detailed outlook for the holidays. But management said it was pleased with customer traffic at the start of the quarter and is happy with Michaels' overall inventory position. As a result, investors have some good reasons to feel positive about this retailing business heading into 2021.