The Michaels Companies, Inc. (NASDAQ:MIK) Q1 2018 Earnings Conference Call - Final Transcript

Jun 14, 2018 • 09:00 am ET

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The Michaels Companies, Inc. (NASDAQ:MIK) Q1 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. My name is Karie and I will be your conference operator today. At this time we would like to welcome everyone to The Michaels Companies First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. (Operator Instructions) Please note this event is being recorded. Thank you and now I'd like to turn the call over to your host, Kiley Rawlins, Vice President of Investor Relations and Communications. Ms. Rawlins, you may begin the conference.

Executive
Kiley F. Rawlins

Thank you. Good morning, everyone, and thank you for joining us today. Earlier this morning we released our financial results for the first quarter of fiscal 2018. A copy of the press release is available in the Investor Relations section of our website at www.michaels.com.

Before we begin our discussion, let me remind you that today's press release and the presentations by our executives on this call may constitute forward-looking statements and are made pursuant to, and within the meaning of, the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. While these statements address plans or events which we expect will or may occur in the future, a number of factors, as set forth in our SEC filings and press releases, could cause actual results to differ materially from our expectations. We refer you to and specifically incorporate the cautionary and risk statements contained in today's press release and in our SEC filings. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of today, June 14, 2018. We have no obligation to update or revise our forward-looking statements, except as required by law, and you should not expect us to do so.

On today's call we will reference non-GAAP financial measures, including adjusted EBITDA as defined in our credit agreement and adjusted operating income, adjusted net income and adjusted diluted earnings per share all adjusted for the restructuring charge and provisional tax adjustments. A reconciliation of these measures to the corresponding GAAP measures are detailed in today's earnings release.

We will begin this morning with highlights from Chuck Ruben, Chairman and CEO; then Denise Paulonis, our CFO, will review our financial results and outlook in more detail. Following our prepared remarks we will open the call for questions. Now I'd like to turn the call over to Chuck Rubin.

Executive
Chuck Rubin

Thank you, Kylie, and good morning, everyone. This morning we reported first quarter sales, adjusted operating income and adjusted diluted EPS in line with the guidance we provided back in March. Total sales were $1.16 billion, adjusted operating income was $126 million and adjusted diluted EPS was $0.39. The quarter unfolded largely as we expected and our teams made progress executing our key initiatives to support longer-term profitable growth. As expected, the quarter was negatively impacted by an earlier Easter and continued sluggish core arts and crafts industry growth.

Comp store sales increased 0.4% driven by strong growth in our e-commerce channels, albeit still a small