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Michael Hill Reports Challenging First Half

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By Published On: January 19, 20240 Comments

Michael Hill has reported its H1 results with the retailer facing challenges across its markets, resulting in store closures and the axing of senior management roles.

Off the back of a record breaking year for sales growth, Michael Hill has revealed its first half results for FY24. The jewellery retailer cites challenging retail conditions for the industry, higher costs of precious metals, and the wider macroeconomic environment effecting consumer sentiment for a less than impressive start to the year. 

Total sales are up 4.1 percent on 2023, at $362.8 million. Digital investments drove some growth in the half, with digital sales representing 8 percent of total Group sales for the half.

The Australian segment performed well, up 10.2 percent YoY at $202.4 million. The newly introduced Canada segment saw little change with a marginal growth of 0.6 percent to $88.3 million. The New Zealand arm of operations however struggled with a 10.3 percent decline YoY to just $65.4 million in sales for H1. 

A variety of factors have impacted the New Zealand segment’s performance from flooding in January 2023, a recession, and a rise in “ram raid” burglaries which saw vandals driving cars into Michael Hill stores across the country and burglarising them, resulting in thousands of dollars of losses and investments in additional security requirements. 

Managing Director and CEO of Michael Hill International Limited, Daniel Bracken said: “Whilst the first half was definitely a challenging period for our business with sales for the core Michael Hill brand down, we are encouraged by our performance against the broader jewellery sector.” 

In this week’s results announcement posted to the ASX, Michael Hill revealed that it had axed “a number” of senior management roles, and closed six underperforming stores, five of which were based in Australia and one in Canada.

“Clearly margin was under pressure from both input costs and promotional activity, and inflationary forces saw elevated costs across many aspects of the business, which together impacted EBIT for the half,” said Bracken. “As a result, the company has taken direct actions to reduce operating costs, including the exit of a number of senior management roles.”

Group comparable EBIT is anticipated to be in the range of between $30m to $33m. 

“Even though consumers continue to monitor their discretionary spend, our multi-brand strategy puts us in a strong position to continue taking market share from our competitors as we expand the Bevilles network and elevate the Michael Hill brand.” 

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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