Jewelry business Michael Hill has maintained strong growth into the first quarter of FY21, with growth margin up and gross profit outpacing sales.
Michael Hill’s branded collections represented 43.3 per cent of total product sales, likely pushing margin growth across all markets – which rose between 100 and 200 bps on the same period last year – while online sales grew 129 per cent.
CEO Daniel Bracken said he was particularly pleased with the first quarter, as though the business saw a double-digit decline in foot traffic a 7.3 per cent same-store sales lift was achieved.
“Our emphasis has shifted from a focus on top line sales and market share recovery to a balance of both margin and sales growth, underpinned by our strategic initiatives. It’s encouraging to see so many of these strategies now flowing through to our results,” Braken said.
“Undoubtedly, the business has been and will continue to be impacted by the Covid-19 pandemic, with uncontrollable impacts in our store network, as seen in Melbourne and Auckland, and ongoing lower foot traffic.”
According to Bracken, 44 stores were shut down due to the pandemic and a further 15 under-performing stores well closed, dropping all-store sales by 3.6 per cent.
Overall, Australian same-store sales were up 12.5 per cent, though only 126 of the businesses 154 stores were open due to trading restrictions in Melbourne.
Likewise, only 49 stores in New Zealand remained open and trading, with 16 closed in Auckland for almost three weeks. Same-store sales in New Zealand were up 4.7 per cent.
“As highlighted in our year-end presentation, we continue to focus on new and exciting opportunities that will gather pace through the coming quarter and over the balance of the year,” Bracken said.
“The company is well positioned as we enter our all important Christmas trading period with a healthy balance sheet and reinvigorated teams in all markets. A well-managed supply chain, an exciting merchandise offer, and our best ever Christmas marketing campaign provide confidence that we can maintain strong momentum across the most significant quarter of the year.”