Michael Hill Warns of Lower-Than-Expected Sales  

Michael Hill has cautioned that the market recovery it had forecast for the latter part of the year did not occur, resulting in a drop in total revenue for its core brand for fiscal 2024. 

“Positive sales momentum had been expected through the second half in line with anticipated improvements in consumer sentiment and economic conditions,” the Australia-based jeweler said last week. “Unfortunately, this has not materialized, with second half sales performance broadly in line with the first half, and margin still under pressure.” 

Group sales for the first 45 weeks of the year were up 4.7% compared to last year, the company noted. However, that total included revenue from Bevilles, which Michael Hill purchased in April 2023 for $30 million. Comparable sales, not including Bevilles, will fall from 2023. 

Revenue for the Australian segment, including Bevilles, is up 12% year on year for the 45 weeks ending May 12. Without Bevilles, sales in Australia improved marginally over the first half, but are down year on year. Meanwhile, sales in New Zealand decreased 11% as macroeconomic pressures “significantly impacted” consumer behavior and discretionary spend, the jeweler explained. In Canada, sales fell 0.4%. 

The company is working on initiatives to stimulate sales and restore its margins, it noted. It is also cutting costs across the business, including inventory, corporate overheads and in underperforming stores. 

“There is no doubt that consumer discretionary spend, and the fine jewelry category in particular, remain under pressure due to macroeconomic forces,” said Michael Hill CEO Daniel Bracken. “Higher interest rates are leading to a sustained and prolonged decline in consumer spending. Looking forward, as interest rates moderate, we anticipate sales and margin recovery.” 

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