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- Michael Hill (MHJ) has revealed sturdy earnings and sales growth over the final quarter of 2021 despite COVID-19 lockdowns forcing dozens of stores to temporarily close their doors
- In an unaudited business update for the December 2021 quarter, the jewellery retailer flagged 9.8 per cent year-on-year growth in all-store sales
- This is expected to drive earnings before interest and tax (EBIT) to between $49 million and $53 million for the first half of FY22 compared to the $44.6 million the year before
- All this comes despite the company losing an aggregate of 2381 trading days across its network of stores largely due to COVID-19 restrictions during the December quarter
- Shares in Michael Hill were steady at $1.43 each at 1:05 pm AEDT on Friday
Michael Hill (MHJ) has revealed sturdy earnings and sales growth over the final quarter of 2021 despite COVID-19 lockdowns forcing dozens of stores to temporarily close their doors.
The jewellery retailer today told investors it grew all-store sales by 9.8 per cent over the December quarter year-on-year, with same-store sales up 9.6 per cent. It should be noted that the figures are unaudited.
The sales growth drove an earnings boost, with Michael Hill expecting to table audited earnings before interest and tax (EBIT) of between $49 million and $53 million for the first half of the 2022 financial year compared to the $44.6 million in EBIT posted over the same time the year before.
All this comes despite the company losing an aggregate of 2381 trading days across its network of stores due to COVID-19 restrictions during the December quarter.
In Australia, Michael Hill had to temporarily close over 70 stores in New South Wales, Victoria, and the Australian Capital Territory. With the stores closed for between two and five weeks, the result was 1574 lost trading days for Michael Hill’s Australian operations.
Similarly, New Zealand introduced its own COVID restrictions over the quarter, with lockdowns across Auckland and Hamilton lasting up to six weeks and resulting in 805 lost trading days for Michael Hill.
While the company’s Canadian arm escaped coronavirus rules, severe weather and flooding in November and early December still impacted operations.
Nevertheless, Michael Hill Managing Director and CEO Daniel Bracken said the company’s careful planning around the Christmas season allowed it to post an “outstanding” quarterly result despite the setbacks.
“From the highly engaging and emotive marketing campaign to the deployment of new digital initiatives, excellence in supply chain and inventory management and our Christmas recruitment strategy, all came together to deliver Michael Hill’s best Q2 in the company’s history,” Mr Bracken said.
“I’m particularly pleased with the result we have delivered considering the significant store closures due to Delta across NSW, VIC and Auckland during October and early November.”
He said while the Omicron outbreak of COVID-19 is posing a new threat to key jurisdictions, the December results demonstrate the success of the transformation of the Michael Hill brand.
The company said it ended the December quarter with a strong balance sheet and disciplined inventory management as it continued to enhance its omnichannel capabilities and grow digital sales.
Shares in Michael Hill were steady at $1.43 each as of 1:05 pm AEDT on Friday. The company has a $555 million market cap.
