Jewellery retailer Michael Hill International has reported a “challenging” first half of FY24 with group sales up only 4.1 per cent year on year.
The company had to shut down six underperforming Michael Hill stores and cut a number of senior management roles to reduce operating costs. However, four new Bevilles locations were opened during the period.
For the 26 weeks ended December 31, group sales edged up to $362.8 million from $348.5 million in the first half of FY23.
Following three years of record results, retail conditions for the fine jewellery sector have been challenging throughout 2023, the company said.
The firm cited lower consumer sentiment, which was impacted by the macroeconomic environment, as well as inflated input costs and aggressive competition.
By segment, sales in Australia were up 10.2 per cent, while sales in New Zealand were down 10.3 per cent versus last year. Sales in Canada were flat with a 0.6 per cent increase.
Digital sales have continued to return to growth and represented 8 per cent of group sales for the half.
“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 for the half,” commented Daniel Bracken, MD and CEO of Michael Hill International.
“Even though consumers continue to monitor their discretionary spend, our multi-brand strategy puts us in a strong position to continue taking market share from our competitors as we expand the Bevilles network and elevate the Michael Hill brand.”
Founded in 1979 in Whangarei, Michael Hill currently has 302 stores across Australia, New Zealand and Canada.