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Michael Hill lifts first-quarter sales by 7.8% as Canada makes up for lagging US

Monday 9th October 2017

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Michael Hill International, the jewellery retailer founded by its namesake, lifted sales 7.8 percent in the first quarter as its performance in New Zealand, Australia, and Canada continued to improve, making up for a dip in US revenue.

Group sales from all stores rose to A$130.3 million in the three months to Sept. 30, from A$120.9 million in the same quarter in 2016. Same-store sales grew 3.5 percent to A$122.7 million in the three months.

Michael Hill same-store sales rose 3.8 percent to A$120.3 million in the first quarter, while Emma & Roe same-store sales dropped 12 percent to A$2.4 million. Total store sales for the Michael Hill chain increased 7.4 percent to A$126.9 million in the quarter, while Emma & Roe total sales jumped 27 percent to A$3.5 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. Still, its troubled US business and its fledgeling Emma & Roe chain posted wider losses.

In the first quarter of 2018, the Michael Hill brand traded well in Canada, up 7.6 percent in same-store sales in local currency in the quarter with total store sales growth of 22 percent to C$26.6 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 9 percent to US$2.6 million while total sales fell 15 percent.

There were 313 Michael Hill stores trading at the end of September, with 10 opened in the period. Three opened in Australia with a further three planned for the December quarter; one opened in New Zealand; six opened in Canada, and another will open in this quarter, with the company looking for "high quality sites" to determine future openings there.

Emma & Roe had 30 stores at the end of the quarter, with one having opened in the period, and is the final stages of a brand review, the company said. In its annual results, 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.

Dual-listed Michael Hill shares gained 2.5 percent to $1.21 on the NZX, and have shed 8.5 percent this year.


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