Revenue during the quarter grew 4.06 percent to $1,750.85 million from $1,682.49 million in the previous year period. Gross margin for the quarter contracted 56 basis points over the previous year period to 40.31 percent. Total expenses were 80.78 percent of quarterly revenues, up from 80.73 percent for the same period last year. That has resulted in a contraction of 5 basis points in operating margin to 19.22 percent.

Operating income for the quarter was $336.56 million, compared with $324.19 million in the previous year period.

However, the adjusted operating income for the quarter stood at $337.44 million compared to $324.19 million in the prior year period. At the same time, adjusted operating margin was almost stable in the quarter to 19.27 percent, when compared with prior year period.

“Today, we reported fourth quarter results within our initial guidance, and I am encouraged that we delivered market share gains and increased earnings,” said Chuck Rubin, Chairman and Chief Executive Officer. “Looking back on the year, I am pleased we increased our free cash flow to $450 million and utilized the strength of our balance sheet to deliver value to our shareholders. Importantly, we made progress against each of the priorities of our Vision 2020 strategy, which is our long-term strategy to increase market share and drive shareholder return.”

For fiscal year 2017, The Michaels Companies, Inc expects revenue to grow in the range of 2.50 percent to 4 percent. the company expects operating income to be in the range of $727 million to $760 million and its expects diluted earnings per share to be in the range of $2.05 to $2.17.

For the first-quarter 2017, The Michaels Companies, Inc expects operating income to be in the range of $141 million to $147 million and its diluted earnings per share to be in the range of $0.38 to $0.40.

The company has spent $266.89 million cash to meet investing activities during the year as against cash outgo of $128.92 million in the last year.

The company has spent $408.11 million cash to carry out financing activities during the year as against cash outgo of $344.03 million in the last year period.

Cash and cash equivalents stood at $298.81 million as on Jan. 28, 2017, down 27.01 percent or $110.58 million from $409.39 million on Jan. 30, 2016.

Working capital declines
The Michaels Companies, Inc has witnessed a decline in the working capital over the last year. It stood at $518.58 million as at Jan. 28, 2017, down 12.82 percent or $76.28 million from $594.86 million on Jan. 30, 2016. Current ratio was at 1.51 as on Jan. 28, 2017, down from 1.66 on Jan. 30, 2016.

Cash conversion cycle (CCC) has increased to 27 days for the quarter from 25 days for the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.

Days inventory outstanding has increased to 49 days for the quarter compared with 46 days for the previous year period. At the same time, days payable outstanding went up to 23 days for the quarter from 21 for the same period last year.