Michael Hill sales climb almost 10%

AUCKLAND: Jewellery company Michael Hill International (MHI) enjoyed a strong earnings performance over the December quarter, despite challenges posed by the Covid19 pandemic.

The company said it expected to report ‘‘significant’’ earnings growth over the first half with earnings before interest and taxation (ebit) in a range of $A49 million$A53 million, up from $A44.6 million ($NZ47.29 million) in the previous corresponding period.

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

For the quarter, group allstore sales were up 9.8% despite 2381 lost store trading days, and samestore sales gained 9.6% 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 2021.

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

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

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

By country, Australia’s samestore sales were up 5.2% in the quarter and allstore sales were up 2.2%, even with 38 New South Wales, 29 Victoria and four Australian Capital Territory stores temporarily closed for between two and five weeks.

That resulted in 1574 lost store trading days for the quarter, up from 874 in the second quarter of last year.

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

In New Zealand, quarterly samestore sales were up 13.4% and allstore sales were up 2.4%.

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, samestore sales were up 11.2% and allstore sales were up 28.1%.

While there were limited ramifications from Covid19 during the quarter, Western Canada was affected by severe weather and flooding at end of November and in early December.

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

Managing director and chief executive Daniel Bracken said the result had been 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. —