Michael Hill sparkles in latest trading
Investors were pleased after jewellery retailer Michael Hill backed up a solid performance in the first half of the year with another strong quarter of growth despite lockdowns affecting trade at its Australian, New Zealand and Canadian stores.
The $300 million retailer saw significant growth in sales for all markets and channels. Same store sales were up 16.4%, while all store sales were up 11.6% for the quarter against prior year.
The company also achieved strong margin improvement which increased more than 200 bps for the quarter compared to FY20, again with all markets delivering strong results, underpinned by an ongoing focus on margin enhancing strategic initiatives.
Unsurprisingly with the impacts of COVID-19 still an issue, Digital sales remain elevated with online sales up almost 70% for the quarter against last year, and up 93.3% year to date, with the standout channel now represented 5.6% of total sales for the year to date.
The strong growth results were achieve despite the store network suffering from closures throughout the period saw a significant number of trading days lost:
In Australia, there were 332 lost store trading days, however all 153 stores were trading at the end of the quarter.
New Zealand closures resulted in 160 lost store trading days, while all 49 New Zealand stores were trading at the end of the quarter
Canada saw the most significant loss of 2,364 store trading days, and while at the end of the quarter, all 86 stores were trading, due to local government lockdowns, 41 Ontario stores were temporarily closed again.
In its trading update, Michael Hill also provided details of a new $70 million funding facility, which is currently undrawn, adding to $50 million in excess cash and nil debt.
Commenting on the result, Michael Hill International Limited, CEO Daniel Bracken said: “I’m delighted by these results, delivering further margin improvement and double-digit sales growth in all markets. Our strategic growth agenda underpins this performance as we accelerate digital innovation, embrace new ways to shop and elevate our brand. Considering the ongoing challenges of navigating COVID-19, particularly in Canada, this result demonstrates the resilience of the Michael Hill business and further validates our transformation to a modern, differentiated, omni-channel jewellery brand. I’ve never been more confident in our leadership team, and with a clear plan for growth, we are well-placed for continued strong results despite the uncertain environment.”