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Michaels (MIK) to Report Q3 Earnings: Is a Beat in Store?

The Michaels Companies, Inc.MIK is slated to report third-quarter fiscal 2018 results on Dec 6, before the opening bell. Notably, the company delivered positive earnings surprise in three of the trailing four quarters, with an average beat of 4.7%.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 44 cents, flat year over year. Estimates moved south by a penny in the past 30 days. Management had earlier envisioned earnings to be at 42-45 cents per share for the to-be-reported quarter. The Zacks Consensus Estimate for quarterly revenues stands at $1,255 million, up 1.2% from the year-ago period.

The Michaels Companies, Inc. Price, Consensus and EPS Surprise

The Michaels Companies, Inc. Price, Consensus and EPS Surprise | The Michaels Companies, Inc. Quote

Let's see how things are shaping up prior to this announcement.

Factors at Play

Michaels remains committed toward enhancing its omni-channel capabilities to boost the top-line performance. Also, the company has been witnessing robust e-commerce sales backed by enhanced ability to search and an expanded assortment. Higher traffic and conversion rates are aiding the company's performance as well. Michaels' focus on improving capabilities like "Buy Online Pick-up In Store (BOPIS)" and ship-from-store is an added positive. For the to-be-reported quarter, management envisions comps growth of 1.5-3%.

However, Michaels has been witnessing strained margins due to higher costs. Rise in distribution-related costs, higher promotional activity and occupancy cost deleverage are keeping the company's margins under pressure. For the fiscal third quarter, adjusted operating income is estimated to be $131-$138 million, down from $153.9 million recorded in the prior-year quarter.

Zacks Model

Our proven model conclusively shows that Michaels is likely to beat earnings estimates in the fiscal third quarter. A stock needs to have both - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - for this to happen. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Michaels has an Earnings ESP of +2.86% and a Zacks Rank #3.

Other Stocks Poised to Beat Earnings Estimates

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

lululemon athletica inc. LULU has an Earnings ESP of +1.55% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

American Eagle Outfitters, Inc. AEO has an Earnings ESP of +0.53% and a Zacks Rank #3.

Costco Wholesale Corporation COST has an Earnings ESP of +1.24% and a Zacks Rank #3.

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The Michaels Companies, Inc. (MIK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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