Shine returns to Michael Hill
Michael Hill is enjoying a turnaround, a year after the start of the pandemic which forced the jewellery retailer to permanently close 15 stores, lifting sales almost 20 per cent in the last quarter while expanding margins and nearly doubling its online business.
In a statement to the ASX on Thursday, the company said same-store sales were up 16.4 per cent against the prior comparable period, and up 10.6 per cent against the same quarter in 2019 - before COVID-19 disrupted the global economy.
Margins expanded by 200 basis points while online sales, which jumped during the pandemic, now represent 5.6 per cent of total sales, compared to 2.9 per cent last year.
Overall store sales lifted 11.6 per cent to $118.5m in the quarter despite the loss of 2856 trading days due to temporary store closures, most notably in Canada, where more than half of the 86 Canadian locations were shuttered temporarily during the period.
While all stores that closed temporarily later reopened and were trading at the end of the quarter on March 28, COVID outbreaks have since forced intermittent closures in Canada and Queensland.
Michael Hill CEO Daniel Bracken said the results vindicated the group's embrace of online sales and an omni-channel retail strategy.
"I'm delighted by these results, delivering further margin improvement and double-digit sales growth in all markets," Mr Bracken said.
"Our strategic growth agenda underpins this performance as we accelerate digital innovation, embrace new ways to shop and elevate our brand."
"Considering the ongoing challenges of navigating COVID-19, particularly in Canada, this result demonstrates the resilience of the Michael Hill business and further validates our transformation to a modern, differentiated, omni-channel jewellery brand."
In the year to date, the company's Australian stores have been the strongest performers.
In the 39 weeks to March 28 all Australian store sales lifted 5.5 per cent on the prior period to $245.2m.
Sales at New Zealand stores lifted 3.7 per cent to NZ$97.2m ($90.02m) while Canadian store sales declined 4.4 per cent to CAN$95.5m ($98.84m).
The company finished the quarter with a positive cash position of $50m with no drawn debt and has entered into a new $70m financing facility with current banker ANZ and new partner HSBC.
Shortly before 2pm shares in the company were trading at $0.815, up 3.82 per cent.
Originally published as Shine returns to Michael Hill