Michael Hill expects earnings bump after “outstanding” first half

Jewelry retailer Michael Hill is expecting earnings to jump between 30 to 40 per cent during the first half of the new financial year, after an “outstanding” performance in Australia and doubling digital sales.

In an update to shareholders, the business said it will likely see 1H21 EBIT land between $41 million to $45 million, up on the $31.6 million earned in the same period last year, and that same store sales rose 6.3 per cent.

Same store sales in Australia rose 12 per cent during the half, while New Zealand rose 2.8 per cent and Canada rose 3.6 per cent.

Michael Hill chief executive Daniel Bracken said all markets delivered positive results during the all-important Christmas trading period, in spite of challenging trading conditions.

“All areas of the business have contributed to this outstanding performance, as the rhythm of the business and our strategic initiatives operated in unison,” Bracken said.

“These results reaffirm our continued focus on a balance of both margin and sales growth, underpinned by a number of our strategic initiatives – brand, digital transformation, loyalty, retail fundamentals and product mix.”

The business’ branded collections, which maintain a higher profit margin than other collections, now make up 38.4 per cent of total product sales.

And due to the continued increase in online retail, the business’ e-commerce sales grew 102 per cent during the half, and now represent 5.8 per cent of the total business.

“All of our global markets were directly impacted by the pandemic in the first half, and I would like to make special mention of our Victorian and now our Canadian teams, who have weathered extended periods of disruption for both themselves and their families,” Bracken said.

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