Michael Hill Forecasts Half-Year Profit

RAPAPORT… Australian jeweler Michael Hill predicted a rise in profit for the current half year after reporting growth in same-store sales.

Sales at branches open for at least 12 months increased 8% year on year in the 22 weeks ending November 29, even as total revenue slipped 1.3% to AUD 224.9 million ($168.2 million), the Queensland-based retailer said Wednesday. The group expects earnings before interest and taxes (EBIT) for the fiscal first half ending December 31 to be “materially” higher than the AUD 31.6 million ($23.6 million) it reported for the same period a year ago, it added.

“Across all channels and segments, the company has delivered strong results for October and November, continuing on the solid growth in sales and margin from the first quarter,” CEO Daniel Bracken commented. “In addition to this impressive top-line performance, the company continues its unwavering focus on costs, and has worked diligently to deliver strong improvements in its cash and balance-sheet position.”

The Australian division saw a 14% jump in same-store sales, while figures improved 3.6% in New Zealand and 5.5% in Canada. However, the company highlighted its concerns about the final weeks of the holiday season, including the possibility of further Covid-19 outbreaks, lower in-store traffic, and a potential impact on profit. At present, 14 stores in Canada are closed in line with local rules, and could remain shut through December, the jeweler cautioned.

“The two weeks of trade leading up to Christmas are critical to the company’s overall performance, and we are keeping a close eye on the evolving restrictions in Canada,” Bracken explained.

Michael Hill’s stock price on the Australian Securities Exchange climbed 18.5% on Thursday following the announcement, ending the day at AUD 0.64 ($0.48).

Image: Michael Hill store in Niagara-on-the-Lake, Canada. (Shutterstock)