Bevilles Acquisition Gives Michael Hill’s Revenue a Boost

Revenue at Michael Hill rose 4% year on year in the first fiscal half amid the addition of its recently purchased Bevilles chain.

Sales came to AUD 362.7 million ($237.7 million) for the six months ending December 31, the Australia-based jeweler said Monday. However, excluding the new locations, group revenue was flat, the company noted. The result was due to a strong base comparison with last year, when the company reported record revenue. In addition, the retailer’s strategy to stop discounting its jewelry came up against “heightened competitor promotional activity across the key Christmas trading period,” it noted. Profit slid 59% to AUD 15.4 million ($10.1 million).

“There is no doubt that the first half was a challenging period for much of the discretionary retail sector,” said Michael Hill CEO Daniel Bracken. “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 [earnings before interest and taxes] for the half.”

Online sales for the period grew, reaching AUD 29.6 million ($19.4 million) and representing 8% of total group sales for the period.

Revenue in Australia climbed 10% year on year to AUD 202.3 million ($132.6 million), while same-store sales — at branches open a year earlier — rose 6%. During the half year, the company opened four Bevilles stores and closed five Michael Hill ones. In New Zealand, revenue dropped 10% to NZD 65.4 million ($40.4 million) and slumped 14% on a same-store basis. Revenue in Canada grew 0.5% to CAD 88.6 million ($65.6 million). Same-store sales in that country decreased 3.8%.

For the first seven weeks of the second fiscal half, group sales, including Bevilles stores, were up 10% year on year, led by a 20% rise in Australia. Sales in New Zealand were down 9% for the period, and they fell 0.9% in Canada.

“While the economic conditions and retail environment remain challenging in all markets, we are encouraged by our ongoing performance in Canada as a lead indicator, and early green shoots in Australia in the second half,” Bracken added.

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Main image: A Michael Hill store in Toronto, Canada. (Shutterstock)