Michael Hill International (ASX:MHJ) Expands Growth Focus Through Digital and Store Strategy

Highlights

• Michael Hill International reported group sales growth of 3.8% in FY26 Q3.
• Group same store sales increased 4.6% across all operating markets during FY26 Q3.
• Canada delivered same store sales growth of 11.3% in local currency during the quarter.
• The company continued expanding its digital and omnichannel retail strategy across markets.

Michael Hill International Limited (ASX:MHJ) has continued strengthening its position across the global jewellery retail market as the company advances a broader growth strategy centred on digital expansion, store optimisation, customer engagement, and operational efficiency.

Operating across Australia, New Zealand, and Canada with 282 stores globally, the jewellery retailer has spent FY26 balancing sales growth initiatives with evolving consumer conditions, while continuing to refine its store footprint and digital capabilities. The company’s latest trading update reflected continued sales growth across all major markets, supported by product initiatives, store upgrades, and broader customer engagement strategies.

Sales Momentum Continues

The company noted that gross margins remained broadly flat compared to the prior year, despite continued pressure from elevated gold and silver input costs.

Management also highlighted ongoing monitoring of changing consumer conditions and increased volatility heading into FY26 Q4 and FY27.

First Half Earnings Improve

For FY26 H1, Michael Hill reported group sales of AUD 371.0 million, representing growth of 3.0% on the prior corresponding period. Group same store sales increased 3.8% during the half.

Comparable EBIT rose 28.6% to AUD 31.0 million, with the uplift primarily linked to higher sales volumes and additional gross profit generation.

Canada recorded another record sales performance during the period, with same store sales growth of 6.1%, while Australia delivered growth of 4.8%. New Zealand reversed previous declines and reported same store sales growth of 1.8%.

Gross margin remained broadly stable at 61.2%, as pricing initiatives and product mix improvements offset higher precious metal costs.

The company also improved its balance sheet position during the period, reporting a group net cash position of AUD 20.7 million compared with a prior-year net debt position of AUD 9.8 million.

Inventory levels declined by AUD 11.3 million to AUD 201.9 million following several working capital initiatives and supplier term negotiations.

Digital Expansion Strategy

Michael Hill identified digital growth as one of its major long-term opportunities, with management describing physical stores as a competitive advantage within an increasingly digital retail environment.

The company noted that digital sales growth during FY26 H1 outpaced overall sales growth, while digital trading margins remained broadly aligned with overall trading margins.

Click & Collect continued supporting store traffic and omnichannel engagement, with most digital sales still involving in-store interaction.

Canada remains the company’s largest identified digital growth opportunity, followed by Australia.

Store Network and Customer Experience

During FY26 H1, Michael Hill opened and refurbished several flagship locations, including stores in Adelaide, Sydney, and Toronto, incorporating updated store formats and modernised customer experiences.

The business also launched a new Auckland Distribution Centre during early FY26 to improve fulfilment speed, customer delivery times, and service capabilities across channels.

Across calendar year 2025, the company reduced its store network by a net total of nine stores as part of its ongoing portfolio optimisation strategy.

Outlook

The company stated that early results indicate its broader retail framework is beginning to gain traction, supported by sales growth, stable margins, digital acceleration, and operational initiatives.

Management identified several future growth drivers, including Canada expansion, Australia and New Zealand productivity improvements, digital acceleration, product innovation, and services-led differentiation.

The company has also reiterated its intention to return to dividend payments at the FY26 full-year results, subject to trading conditions continuing in line with expectations.

Shares of MHJ traded at AUD 0.37, up around 1.4%, at the time of writing on 11 May 2026.