We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Michaels Soars in 3 Months as Stores Reopen After Coronavirus
Read MoreHide Full Article
Shares of The Michaels Companies, Inc. skyrocketed 274.6% in the past three months, significantly outperforming the industry and Retail-Wholesale sector’s growth of 66.8% and 34.9%, respectively. The stock’s bullish run on the bourses can be attributable to the company’s store reopening efforts, following temporary store closures led by the coronavirus pandemic.
The company is gradually reopening stores in a phased manner, in sync with the local health guidelines. As of Jun 4, 2020, 1,000 stores have reopened, and the company expects 1,273 stores to reopen by June-end. At the reopened stores, the company is witnessing encouraging trends.
Moreover, its solid online show provided cushion to the top line as stores remained closed for most part of the first quarter of fiscal 2020. Notably, e-commerce sales surged significantly to $118.8 million in the said quarter, driven by new delivery options, including curbside pick-up, same day delivery, expanded ship-from-store and BOPIS capabilities along with in-app purchases. Management foresees e-commerce sales growth to continue in the near term. Also, efforts such as optimizing digital spending, enhancing web capabilities and customizing the website as per consumer preferences bode well.
Apart from these, Michaels remains on track with its core 'Maker' strategy, which aims at building the business better, leveraging digital and data, and repositioning the business. In this regard, it opened its first Maker store in McKinney, TX, which offers personalized assortment, better layout, improved services and a host of omnichannel capabilities. The company plans to open more such stores in fiscal 2020.
Further, it is progressing well to maximize marketing productivity through its media-mix model, wherein it will shift to higher productivity media options such as digital and addressable TV, without increasing the spending. Michaels also implemented a pricing and promotion strategy, which is likely to help optimize discounts and improve customers’ perception of the value it offers through discounts, coupons and other promotional activities.
However, the COVID-19 situation affected the company’s sales in the fiscal first quarter due to temporary store closures. Moreover, management refrained from providing any fiscal 2020 guidance due to the uncertain impacts of the ongoing COVID-19 outbreak. In addition to this, a dismal margin trend anda rise in costs related to COVID-19 impacts act as deterrents.
All said, we believe that strong digital growth and store reopening initiatives are likely to help this Zacks Rank #3 (Hold) stock revive from the COVID-19 crisis soon.
Office Depot (ODP - Free Report) , also a Zacks Rank #2 stock, has an impressive long-term earnings growth rate of 6.8%.
Lowes Companies (LOW - Free Report) , which presently carries a Zacks Rank #2, has an expected long-term earnings growth rate of 15.2%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Michaels Soars in 3 Months as Stores Reopen After Coronavirus
Shares of The Michaels Companies, Inc. skyrocketed 274.6% in the past three months, significantly outperforming the industry and Retail-Wholesale sector’s growth of 66.8% and 34.9%, respectively. The stock’s bullish run on the bourses can be attributable to the company’s store reopening efforts, following temporary store closures led by the coronavirus pandemic.
The company is gradually reopening stores in a phased manner, in sync with the local health guidelines. As of Jun 4, 2020, 1,000 stores have reopened, and the company expects 1,273 stores to reopen by June-end. At the reopened stores, the company is witnessing encouraging trends.
Moreover, its solid online show provided cushion to the top line as stores remained closed for most part of the first quarter of fiscal 2020. Notably, e-commerce sales surged significantly to $118.8 million in the said quarter, driven by new delivery options, including curbside pick-up, same day delivery, expanded ship-from-store and BOPIS capabilities along with in-app purchases. Management foresees e-commerce sales growth to continue in the near term. Also, efforts such as optimizing digital spending, enhancing web capabilities and customizing the website as per consumer preferences bode well.
Apart from these, Michaels remains on track with its core 'Maker' strategy, which aims at building the business better, leveraging digital and data, and repositioning the business. In this regard, it opened its first Maker store in McKinney, TX, which offers personalized assortment, better layout, improved services and a host of omnichannel capabilities. The company plans to open more such stores in fiscal 2020.
Further, it is progressing well to maximize marketing productivity through its media-mix model, wherein it will shift to higher productivity media options such as digital and addressable TV, without increasing the spending. Michaels also implemented a pricing and promotion strategy, which is likely to help optimize discounts and improve customers’ perception of the value it offers through discounts, coupons and other promotional activities.
However, the COVID-19 situation affected the company’s sales in the fiscal first quarter due to temporary store closures. Moreover, management refrained from providing any fiscal 2020 guidance due to the uncertain impacts of the ongoing COVID-19 outbreak. In addition to this, a dismal margin trend anda rise in costs related to COVID-19 impacts act as deterrents.
All said, we believe that strong digital growth and store reopening initiatives are likely to help this Zacks Rank #3 (Hold) stock revive from the COVID-19 crisis soon.
3 Stocks to Consider
The Kroger Co. (KR - Free Report) has an impressive long-term earnings growth rate of 4.9% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Office Depot (ODP - Free Report) , also a Zacks Rank #2 stock, has an impressive long-term earnings growth rate of 6.8%.
Lowes Companies (LOW - Free Report) , which presently carries a Zacks Rank #2, has an expected long-term earnings growth rate of 15.2%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>