Michael Hill lifts 1H sales but US business, Emma & Roe brands still under consideration

Michael Hill International, the jewellery retailer founded by its namesake, lifted revenue 4.7 percent in the first half, though its US business continued to struggle.

Group sales from all stores rose to A$341.5 million in the six months to Dec. 31, 2017, from A$326 million in the previous first half. Same-store sales grew 0.5 percent to A$317.3 million in the six months.

Michael Hill same-store sales rose 0.7 percent to A$310.1 million in the first half, while Emma & Roe same-store sales dropped 5.4 percent to A$7.2 million. Total store sales for the Michael Hill chain increased 4.3 percent to A$331 million in the half, while Emma & Roe total sales jumped 20 percent to A$10.5 million in the period.

In the latest financial year, the jewellery company boosted annual profit by two thirds as its Michael Hill chain grew steadily in its main markets of Australia and New Zealand and recorded stronger growth in Canada, while its troubled US business and fledgeling Emma & Roe chain posted wider losses.

The company said the US business continued to struggle and it "continues to closely monitor the performance of the US segment given its ongoing poor performance."

Emma & Roe was in an improved position compared to the end of the first quarter, when total sales rose 27 percent but same-store sales dropped 12 percent, the company said. It has been undergoing a "comprehensive brand review" and said that is now in the final stages, with management reviewing the findings. In its annual results last year, the company said losses from the brand had exceeded expectations and it would likely adjust the brand, which sells charm bracelets and accessories, in the current financial year.

There were 317 Michael Hill stores trading at the end of December, with 14 opened in the period. Six opened in Australia, bringing the total there to 172; one opened in New Zealand; seven opened in Canada, bringing stores there to 83, and the company says the pace of further openings there will be dictated by the availability of suitable locations and leases.

In the first half of 2018, Michael Hill's Canada same-store sales were up 4.8 percent in local currency terms, with total store sales growth of 18.1 percent to C$73.1 million dollars. Same-store and total sales for the brand also rose in New Zealand and Australia, but in the US same-store sales dropped 10 percent to US$5.7 million while total sales fell 14.6 percent.

Dual-listed Michael Hill shares gained 0.8 percent to $1.35 on the NZX, and have shed 6,2 percent in the past 12 months.

(BusinessDesk)