...Category Leader: The Michaels Companies, Inc. (Michaels) is the leader in arts and crafts retail. The company has been resilient to discounters given the breadth/depth of merchandise required in this category, as well as customer loyalty-driving initiatives such as in-store classes. Michaels has succeeded against online retailers due to the low average ticket (making shipping economics difficult) and customers' desire to handle products before purchase. Michaels' customer service focus has helped it defend share from both of these threats. Consistent Annual Growth: Comparable store sales (comps) growth has ranged from 1.5% to 3.2% on an annual basis since 2010, proving the consistency of the Michaels model. Improved sales productivity and fixed-cost leverage have allowed EBITDA margins to expand from 15.8% in 2010 to an expected 17.0% in 2015 on around 2.4% constant currency comps. Beginning in 2016, Fitch Ratings expects 2%¡3% annual square footage growth and 1%¡2% annual comps growth...
