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.”
”
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Originally Posted by winner69
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