Michael Hill celebrates a merry Xmas as sales surge

Author
Jamie Gray, NZ Herald,
Publish Date
Fri, 14 Jan 2022, 4:18PM

Michael Hill celebrates a merry Xmas as sales surge

Author
Jamie Gray, NZ Herald,
Publish Date
Fri, 14 Jan 2022, 4:18PM

Jewellery company Michael Hill International (MHI) enjoyed a strong earnings performance over the December quarter, despite challenges posed by Covid-19. 

The company said it expects to report "significant" earnings growth over the first half with EBIT in a range of A$49m-A$53m, up from A$44.6m ($47.29m) in the previous corresponding period. 

The company said there had been strong sales growth in all its markets and channels. 

For the quarter, group all store sales were up 9.8 per cent despite 2,381 lost store trading days, and same store sales gained 9.6 per cent against the prior year. 

MHI said there had been continued margin expansion of 200 to 300 basis points in all markets and channels against the second quarter of its 2021 year. 

In the year-to-date, digital represented 8.2 per cent of total sales, up from 6.3 per cent in 2021. 

Inventory management and strong sales led to a healthy cash position at the end of the quarter. 

There were no store openings or closures during the quarter, and the network remained at 285 stores. 

By country, Australia's same store sales were up 5.2 per cent in the quarter and all store sales were up 2.2 per cent, even with 38 New South Wales, Victoria and four ACT stores temporarily closed for between two and five weeks. 

This resulted in 1,574 lost store trading days for the quarter, up from 874 in the second quarter of 2021. 

All 150 Australian stores were trading at the end of the quarter. 

In New Zealand, quarterly same store sales were up 13.4 per cent and all store sales were up 2.4 per cent. 

Mandated lockdowns across greater Auckland and Hamilton for up to six weeks during the quarter resulted in 805 lost store trading days. 

All 49 New Zealand stores were trading at the end of the quarter. 

In Canada, quarterly, same-store sales were up 11.2 per cent and all store sales were up 28.1 per cent. 

While there were limited impacts from Covid during the quarter, Western Canada was impacted by severe weather and flooding across end of November and early December. 

All 86 stores were trading at the end of the quarter. 

Managing director and chief executive Daniel Bracken said the result was achieved against the background of widespread temporary store closures in Australia and New Zealand over October and early November. 

"And as we now enter 2022, the new Omicron variant is bringing new challenges across our Australian and Canadian network, both in terms of impacts on our team members and consumer confidence and behaviours," he said. 

Michael Hill International was founded by Sir Michael Hill in 1979. 

The group has 285 stores across Australia, New Zealand and Canada.