Michael Hill International, the jewellery chain that bears its founder's name, said sales growth stalled in the second quarter, which limited earnings growth in the first half of the year.
"December quarter sales, including the critical Christmas trading period, fell short of our forecasts and didn't deliver the improvement over last year that the company had expected," the Brisbane-based company says in a statement.
Earnings before interest and tax in the six months ended December 31 were in a range of $34 million to $36 million, from $34.8 million a year earlier, it says.
In its annual report published in September, chief executive Mike Parsell said the chain was seeking an increase in same-store sales and ebit in the 2012-13 financial year, especially in Australia.
Michael Hill is the first NZX 50 company to give an earnings update ahead of the results season that kicks in next month and investors are waiting to see whether more companies give guidance ahead of their results.
"Most companies are going to be cautious in terms of their outlook statements," says Shane Solly, portfolio manager at Mint Asset Management. "February is going to be pretty interesting."
Despite the weaker-than-expected second quarter, Michael Hill's sales for the first half rose 8.8 percent to $312.8 million, led by growth in its biggest market of Australia, up 9 percent to $206.7 million.
Sales in New Zealand rose 3.7 percent to $63 million, Canadian sales rose 19.4 percent to $36 million and US sales rose 0.8 percent to $6.7 million.
On a same-store basis, sales rose 2.6 percent to $287.7 million, with Australian sales on that basis up 2.6 percent and New Zealand up 3.1 percent.
"All four markets struggled to gain traction over last year's sales in the second quarter" though they achieved "solid" same-store sales growth, it says.
Shares of Michael Hill last traded at $1.25 and have advanced 43 percent in the past year. They are rated "outperform" based on two recommendations compiled by Reuters.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- English: I’m not going anywhere
- Ardern: new government will follow Labour's immigration policy, not NZ First's
- What's in the Labour/NZ First agreement for businesses? Not much, so far
- Kermadec Ocean Sanctuary plan still on the table: Shaw
- All Whites are long odds vs Peru in FIFA qualifier but NZ gets tourism payback
Most listened to
- Lewis Road ceo Peter Cullinane says Southern Pastures was the best fit of potential investors they spoke to
- Telecommunications Users Association's Craig Young says Vocus are getting ready for a familiar experience, getting sold
- Labour leader Jacinda Ardern and NZ First leader Winston Peters discuss their foreign ownership plans
- Rodney Hide, unlike the public, is unsurprised at the insanity of politics
- Jacqueline Rowarth on how food production advances have influenced our consumption habits
- NBR Radio: The best interviews, with Grant Walker — updated daily