This is good news for MHJ. Kiwis love cheap.
Emm, as for my Tiffany purchases over the years. Not so good.
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This is good news for MHJ. Kiwis love cheap.
Emm, as for my Tiffany purchases over the years. Not so good.
Great news - I happily choose lab diamonds over mined every time, the sooner the artificial scarcity that the diamond industry has created over the last century evaporates, the better.
As for MHJ - consumers don’t have any idea what the wholesale price of gemstones are, so I’m hoping this leads to supporting margins.
this from DMX. Bit of a weird investment for them tbh.
More concerningly has been the continued erosion to the operational performance of Michael Hill. This now small position declined a further 33% in May on the back of a negative trading update. The company is suffering from weakening consumer demand, tighter consumer credit availability, the impact of crime on its NZ business& the associated additional security costs, contracting gross margins, and troubles with the integration of the acquired Bevilles business in Australia. This investment’s proving to be a painful reminder of the difficulties of retail in general, but also that the world changes, companies have a lifespan and go through phases of growth, maturity, and unfortunately, decline. We don’t need to make our money back the same way we lost it, but at current levels, we believe the shares are being priced for disaster. We’d previously reduced our position as the company started reporting negatively, and its price erosion has further reduced it to a relatively small holding now. We’re comfortable to give this one some time to see if they can successfully reduce costs and restore a basic level of profitability. Its 40+ year history should be worth something here, and we’re hopeful of at least a partial recovery to our remaining investment.
https://www.nzherald.co.nz/nz/michae...BTRDEQF6KOGME/
Michael Hill Jeweller to close Whakatāne store due to high retail crime
could be more of this to follow from other retailers in areas which have similar crime issues
It’s wild that New Zealand hasn’t been able to adapt to simple crime techniques that have been around for decades overseas. We lived in such a sheltered country, and all it took was some gangs to figure out how to do these simple acts and we have had several years of chaos with pitiful response from the police and political leaders.
Yes a particular cohort of society, primarily younger people not in work education or training have worked out that there is no effective response to crime. Police have been trained to be social workers first and law enforcement second. The judiciary has been particularly unhelpful to the police and public in general by tempering sentences with excessive focus on upbringing and excuses rather than a straight out crime/discouragement position, coupled with pressure from politicians to keep people from being locked up even briefly as a deterrent. No real consequences means more of the same.
Trading update:
https://api.nzx.com/public/announcem...731-423008.pdf
Looks actually positive, wasn't expecting that.
Attachment 15190Quote:
Michael Hill International Limited (ASX/NZX: MHJ) is pleased to provide a trading update for the 52-week year ended
30 June 2024.
Challenging retail trading conditions have continued throughout the year, with macroeconomic forces impacting the
discretionary retail sector, and in particular, the fine jewellery category. However, recent trading performance has seen
positive sales momentum across all markets.
KEY POINTS
• Comparable EBIT – In line with analysts’ expectations, the Company anticipates FY24 Group comparable EBIT of
between $14m to $16m.
• Group sales – For the year, Group sales (including Bevilles) were up 3.8% on LY, and second half sales were up 4.9%
on LY, an improvement on our most recent market update. The last seven weeks of FY24 demonstrated positive
momentum across all markets and channels, with Group sales up 6%, and the core Michael Hill brand in Australia
and Canada both achieving positive sales growth compared with the prior comparable period.
• Gross margin and inventory – While trading improved through May and June, there was also a deliberate focus on
clearing inventory to make way for higher margin product in FY25. Gross margin settled at ~60.5% for the year, with
closing inventory levels better than management expectations.
• Digital growth – Digital sales have returned to double digit growth on prior year, with the re-platforming of the
website supporting the relaunch of the elevated Michael Hill brand.
• Capital Management – As a proactive capital management measure, the existing debt facility has been increased by
$40m for the four-month period from 15 September 2024 to support seasonal working capital requirements for
Christmas trade. The FY24 year-end net debt position closed at ~$40m.
• Store portfolio management – In line with our store network strategy, the core Michael Hill brand has continued to
optimise its store network throughout the year, while at the same time expanding the Bevilles’ store network from
26 to 36 stores. The Group finished the year with 300 stores.
Retail Segment Update
Australia: For the year, segment revenue (including Bevilles) increased 10.5% on LY, and increased 12.0% in
H2. There were 171 stores (including 36 Bevilles stores) trading at the end of the year (FY23: 172).
New Zealand: For the year, segment revenue decreased 11.8% on LY, and decreased 12.0% in H2. There were
44 stores trading at the end of the year (FY23: 46).
Canada: For the year, segment revenue increased 0.3% on LY, and increased 1.6% in H2. There were 85 stores
trading at the end of the year (FY23: 86).
Commenting on the result, Managing Director and CEO of Michael Hill International Limited, Daniel Bracken said:
“While challenging economic conditions have persisted across all markets throughout the year, particularly in the fine
jewellery segment, the Group has continued to outperform the category, with a focus on retail fundamentals and
execution of its clearly articulated strategies. Particularly pleasing was the consistent performance of our Canadian
business throughout the year.
“While FY24 was disappointing, and trading conditions are expected to remain challenging, initiatives are underway to
drive sales and productivity, enhance margin, optimise inventory, prioritise and reduce capital expenditure to protect
the balance sheet, and further embed cost conscious discipline across the business.
“As a key milestone of the Michael Hill brand elevation journey, April saw the unveiling of our first global flagship store
at Chadstone in Melbourne showcasing the new brand codes, our first brand ambassador, Miranda Kerr, and a complete
re-platforming of our website. I am extremely proud of the enthusiasm, passion and dedication demonstrated by all our
team involved in the meticulous and considered delivery of such a pivotal moment for the Michael Hill Brand.”
”
Market obviously liking the trading update.
“Particularly pleasing was the consistent performance of our Canadian business throughout the year,” Bracken said.
Canada not a dead duck …but still a drag on Group performance
Mind NZ iis an even lamer duck …wonder how much NZ losses end up as?