...February 10, 2025 Michaels faces a difficult operating environment in 2025. S&P Global Ratings forecasts a multitude of risks, including soft consumer demand for arts and crafts, slowing economic growth, persistent inflation, and higher supply chain costs, that could potentially challenge the company's performance this year. In addition, the recent bankruptcy of Joann Inc., Michaels' closest direct competitor, may negatively affect its performance over the near term if the company liquidates or closes a substantial portion of its stores. Further, the recently imposed 10% incremental tariff on imports from China, where the company sources a significant proportion of its offerings, could weigh on its profitability if left in place and management's mitigating actions are insufficient to offset the additional costs. Cautious consumer behavior is weighing on the company's sales. Year-to-date through Nov. 2, 2024, Michaels' sales declined by 1% on a 3.1% contraction in its comparable sales, which...
