Michael Hill full-year sales rise 6% on new store openings

Michael Hill International reported a 6 percent gain in full-year sales, reflecting a net increase in new stores. Canada was the jewellery retailer's stand-out market in the latest year.

Sales rose to A$583 million in the 12 months ended June 30 from A$549.9 million a year earlier, the Brisbane-based retailer said in a statement. Opening new stores provided the biggest impetus to sales growth and same-store sales rose a more modest 1.5 percent.

The retailer opened 13 of its Emma & Roe stores bringing the total under that brand to 29 and opened 14 Michael Hill branded outlets while closing seven, leaving it with 304, and a total number of outlets of 333.

The increased Emma & Roe meant sales jumped 62 percent to A$15 million, although on a same-store basis sales fell 1.9 percent. Michael Hill store sales rose 5 percent to A$568 million, or 1.5 percent on a same-store basis. The company didn't release earnings figures today.

"Gross margin will be slightly down for the year in part due to the tougher than expected Australasian market and in part due to discounting of surplus inventory being cleared to help fund our branded collections rollout," it said. "The seven Michael Hill stores closed during the year were all, except one, at the end of their lease terms and were no longer deemed to be commercially viable under our strict investment guidelines."

In Canada, sales rose 19 percent to C$113 million, or 8.8 percent on a same-store basis.

"Michael Hill is now the second-largest jewellery retail chain in the Canadian market and continues to take market share from the competition," it said. "Nine stores were opened during the period giving a total of 76 at the end of June."

US sales fell 13 percent to $12.4 million, or 13 percent on a same-store basis. Its Easton Centre store in Columbus, Ohio, was closed in June because of sustained poor performance with exit costs of US$650,000 and its US business "continued to struggle throughout the year," it said.

New Zealand sales declined 0.7 percent to $122 million, and fell 0.8 percent on a same-store basis, while in its biggest market of Australia, sales rose 4.1 percent to A$322 million, and on a same-store basis sales were up 1.2 percent. It opened three new stores in Australia and closed five underperforming outlets, for a total of 166.

Michael Hill's dual-listed shares fell 0.4 percent to A$1.16 on the ASX and have fallen 7.2 percent in the past 12 months.

(BusinessDesk)