Thursday 10th December 2020
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Michael Hill International Limited today provides an interim trading update for the 22 week period ended 29 November 2020. Despite managing the ongoing challenges of a global pandemic, the Company continued to deliver growth in both same store sales and gross margin for the October/November period.
• Maintained strong same store sales growth in all markets and channels – Same store sales for the 22 week period were up 7.9%, against last year. Same store sales for the October/November period were up 8.5%, against last year.
• Sustained margin improvement – Margin growth of ~200 bps for the 22 week period, against last year, underpinning an increase in gross profit.
• Continued strong growth in digital sales and margin – All markets achieved a significant lift in sales, resulting in online sales increasing by 110% for the 22 week period, against last year.
While this trading announcement is focused on the positive start to the first 22 weeks of FY2021, as we enter the final critical weeks of Christmas trade, concerns remain around further COVID-19 outbreaks, lower instore foot traffic, and their potential impact on first half earnings. In accordance with local provincial requirements, 14 Canadian stores are temporarily closed, and could remain closed through December, due to COVID-19 lockdowns. The Company continues to monitor the potential impact on trading conditions in Canada.
Despite temporary store closures and ongoing foot traffic impacts on the key Christmas trading period, it is currently anticipated the Company is likely to deliver an EBIT result for FY21H1 materially exceeding the prior year half one result (FY20H1: $31.6m), before taking into account the favorable impact of wage subsidies and AASB 16 Leases.
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