The shares were up 7.5% to $6.02 in trading Wednesday.
Michaels reported adjusted earnings per share of 19 cents for the quarter, which beat expectations of 14 cents and was above 15 cents last year. Net income was $24.5 million, down from $27.5 million in the second quarter last year, the company stated. Adjusted net income was $29.6 million, up from adjusted net income of $26.4 million a year ago.
Revenue came in at $1.03 billion, which was above expectations of $1.02 billion and down from $1.05 billion a year ago. The company said the year-over-year sales drop was due largely to the closure of the Pat Catan's stores in fiscal 2018.
Comparable-store sales rose by 0.3%.
"We are pleased to return to positive comparable-store sales in the second quarter of fiscal 2019. Our teams are focused on driving sales and executing on our 2019 priorities, and the early results show the customer is responding positively," interim CEO Mark Cosby said in a statement.
The Irving, Texas-based company said it expects comparable-store sales to be flat to up by 1% in the third quarter and "approximately flat" for fiscal 2019.
Adjusted EPS is expected to come in between 46 cents and 51 cents in the third quarter, which is in the higher range of expectations of 46 cents. Adjusted EPS for fiscal 2019 will be between $2.31 and $2.42 vs. expectations of $2.34.
Michaels shares are bouncing back from a record low of $4.96 reached on Aug. 15, but remain more than 60% below the 52-week high of $18.04 in mid-November.
Wells Fargo Securities analyst Zachary Fadem reiterated his market perform rating on the stock, but lowered his price target to $6 from $8.
"Expectations were clearly low heading into the print (short interest ~30%), so it shouldn't be surprising that MIK's better-than-feared Q2 results are driving a relief rally today," Fadem wrote in a note Wednesday.
"In our view, MIK's return to Q2 comp growth is largely attributed to a transition back to high/low pricing after previously experimenting with an everyday value (EDV) pricing approach that did not resonate with consumers. That said, it is important to note that Q2 is MIK's smallest (and arguably least important) quarter ....," he also wrote.
"While MIK is making progress, and levers remain on pricing/promo, marketing and tariff-mitigation initiatives, we see MIK's turnaround process as multi-year (rather than multi-quarter), with considerable heavy lifting to do on customer experience, assortment and ecommerce initiatives."
He described Wednesday's really as "likely short-lived, placing shares squarely in 'show me' territory for 2H."