Like every year, Michael Hill International has reported November and December being the largest trading months in the year 2018. The group revenues for continued operations and same-store sales increased by 2.9% and 1.3% respectively during these two months compared to the previous corresponding period.
But for the entire six months to 31 December 2018, a jewelry company Michael Hill International Limited (ASX: MHJ) has posted negative results. Revenue from continuing operations has declined by 4.2%, and same-store sales were down by 6% for 1H FY19. It reflects the impact of first quarter performance in which revenues for continued operations and same-store sales have drifted to the lowest levels, down by 8.8% and 11.0% respectively. However, the company has managed to maintain its 1H FY19 gross margin at 62.7% same as it was in the first half of Fiscal 2018.
Michael Hill International CEO Daniel Bracken stated, “The company demonstrated resilience and agility in responding to the challenges of the opening four months, and delivered positive sales in the key Christmas trading period.”
Mr. Bracken added that Michael Hill’s performance during the key November and December trading period was encouraging on the back of significant marketing activities and event promotions that were undertaken during the Christmas season.
Further, the announcement read that MHJ’s e-commerce sale has increased by 59.3% to $8.1m for the period and represent 2.6% of total sales for the continuing operations. Whereas, its Branded Collection sales were reportedly up by 11% to 20% of total product sales, compared to the previous 18% of total product sales for FY18.
On activities front, the jeweler has opened six Michael Hill stored and wrapped up three under-performing stores during the six months ended 31 December 2018. The company has further continued with the planned closure of its international lifestyle brand, Emma & Roe. As per the plan, four Emma & Roe stores were reportedly closed during the first quarter. However, two Emma & Roe stores and the Emma & Roe website continue to trade while the company is in talks for store closure negotiations.
For the second quarter of Fiscal 2019, the company has reported slight improvement compared to first quarter results. It translates a decline of 1.3% in revenues for continued operations and 2.9% in same-store sales, compared to -8.8% and -11.0% in FY19Q1.
Mr. Bracken added “This growth to end the quarter outlines the strong platform available to continue building the strategy towards the company’s ambition to become a globally relevant leader in the premium jewelry category. The company remains focused on strengthening the business in 2019 as it continues to evolve its strategy.”
On 16 January 2019, MHJ traded flat. The stock price last traded at $0.600 with a market capitalization of $232.46 million. Over the past 12 months, the stock price has declined by 51.42%.