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The latest Michael Hill International financial report showed positive news.
The latest Michael Hill International financial report showed positive news.

Michael Hill International reports strong half-yearly results

The latest financial report from Michael Hill International indicates the jewellery chain’s revenue increased 4.4 per cent in the six months to 26 December 2019, to $329.5 million.

Same-store sales rose 3.3 per cent in Australia, 5.1 per cent in Canada, and 6.6 per cent in New Zealand. Notably, while e-commerce sales increased by 44.3 per cent, they represented just 3 per cent of total revenue.

Australia remains Michael Hill’s largest market, accounting for 55 per cent of total revenue.

During the same period, profits increased 19.6 per cent compared with the same period in FY19 – though the FY19 H1 figure was revised down by $1.9 million to account for remediation payments made to employees.

Had the remediation payment not been made, the profit increase would have been 8.9 per cent. The $1.9 million was the first tranche of funds allocated to repay Australian employees, who were found to have been underpaid over a six-year period during a company audit in 2019.

Daniel Bracken
Daniel Bracken
"We are navigating a challenging retail environment that requires a balanced approach"
Daniel Bracken, Michael Hill International

Michael Hill International previously indicated that it may be liable for up to $25 million in unpaid entitlements.

Notable results

During the second half of 2019, the retailer opened one new store in Canada and closed three under-performing locations in Australia, leaving it operating 304 stores worldwide.

Daniel Bracken, CEO Michael Hill International, attributed the results to “disciplined cost management, nil net debt, lower inventory levels and improving stock turn”, adding: “We are navigating a challenging retail environment that requires a balanced approach between sales momentum and margin realisation.”

The second half of 2019 saw the launch of several key initiatives for the retailer, including its e-commerce loyalty program Brilliance – which will be introduced in-store this year – a customer feedback program called Sparkle, and a lab-created diamond engagement ring collection, previously reported by Jeweller.

The company also conducted a promotional campaign for the 40th anniversary of the business, alongside the Black Friday sale and Christmas.

Bracken noted that the impact of “local and global environmental factors” – such as the Australian bushfires – had been limited. In addition, he told the Australian Financial Review, that Michael Hill International is less exposed to supply chain disruption due to the coronavirus epidemic, as only 5 per cent of its products are manufactured in China.

 

More reading:
Michael Hill's lab-grown diamond marketing may mislead consumers
Michael Hill looks for turnaround, introduces lab-grown diamonds
Michael Hill underpaid staff by up to $25 million











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