Michael Hill Revenue Rises Despite Challenging Economy

Michael Hill saw record full-year sales for fiscal 2023, driven by strong performance in the first half and a boost from the newly acquired Bevilles chain.

The Australia-based retailer’s revenue rose 6% to AUD 629.6 million ($407.2 million) during the 12 months that ended July 2. While net profit slipped 25% to AUD 35.2 million ($22.8 million), it was still the second-highest in the company’s history, the jeweler reported last week.

Digital sales were primarily flat at AUD 41.3 million ($26.7 million), compared to the previous year’s AUD 41.9 million ($27.1 million). Bevilles, which the retailer purchased in April for $30 million, contributed four weeks of sales to group revenue.

The rise in sales resulted from a strong first half, but conditions in the second half were more challenging.

“Trading in the second half proved to be much harder, with economic headwinds impacting consumer confidence, and in turn sales,” said Michael Hill CEO Daniel Bracken. “Considering the pressures we have experienced on input costs across both diamond and gold pricing, our margins held up well.”

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Michael Hill plans to focus on growing the Bevilles brand and completing its integration and store rollout. In addition to the existing 26 locations the group acquired, at least three new Bevilles stores are set to open before Christmas, with more in the works for the second half of fiscal 2024.

Michael Hill also intends to grow its own brand outside of its three core markets — Australia, New Zealand and Canada. It has formed a partnership with Asian fashion brand Zalora, introducing Michael Hill jewelry to Singaporean and Malaysian consumers.

Same-store sales grew 9% in Australia and 6% in New Zealand, but remained flat in Canada.

For the first two months of fiscal 2024, group sales are up 1.2% year on year.

“There is no doubt that retail conditions have continued to be very challenging in all markets, with sales growth moderating [following the] record first-quarter sales in the prior year,” Bracken commented. “While inflation and rising interest rates have impacted consumer spending, I am confident that the group strategy has us well-placed to continue to take market share.”

Main image: A Michael Hill store in Brisbane, Australia. (Shutterstock)