Support our sponsors:

NZX 50 Index	3342.88	16.10
S&P/ASX 200	4282.90	0.00
Dow Jones Industrials	12890.50	6.50

Twitter

Facebook

RSS

Michael Hill margins shrink in Australia amid discounting

Monday 12th October 2009

Text too small?

Michael Hill International said margins contracted in Australia, the jeweller’s biggest market, amid discounting to maintain sales growth.

Same-store sales in Australia, which makes up 68% of the retailer’s revenue, climbed 2.3% to A$44.7 million in the three months ended September 30, the company said in a statement today. Sales growth was 4.1% in kiwi dollar terms. Michael Hill’s shares gained 1.4% to 72 cents and have soared 39% this year.

Total sales for the company rose 6.3% to $84.6 million while sales open at least 12 months slipped 0.4% to $77.2 million, mainly reflecting a decline in revenue from Canada.

“North America continues to be challenging, with Canada struggling for most of the quarter,” chairman Michael Hill said in the statement. “The ongoing US economic conditions have also dampened consumer confidence in Canada. We are not expecting this will materially improve in the next quarter."

In New Zealand, Michael Hill’s margins fell on increased promotions and a pick-up in customers buying on credit. Same-store sale rose 0.6% to $17.2 millionIn the US, where the company acquired stores from a failed jewellery chain, the clearance of the Whitehall's merchandise was almost complete and margins are now improving, Hill said.

"Reaching levels of revenue sufficient to be profitable is still some way off and not expected in the short-term," he said.

Businesswire.co.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.