Retail stocks rise on NZX after increase in Christmas spending

By - Manika


  • Retail sales were up 2.6% on Boxing Day in New Zealand
  • Spending in the holiday season was a record high, says Worldline
  • NZX retail stocks rose after the New Zealand stock exchange opened today

The New Zealand Stock Exchange (NZX) opened today (28 December 2022) after the Christmas holidays. Since Christmas fell on Sunday, the NZX considered 27 December 2022 as the Christmas Day public holiday. The last trading day before Christmas on the NZX was on 23 December.

The Christmas season was very positive for the retail sector. According to the electronics payments network Worldline, Kiwis spent approximately NZ$100.5 million on Boxing Day, a 2.6% increase over last year’s sales.

The spending was at a record high as per Worldline but lower than spending on Black Friday. According to Worldline NZ, spending on both days remained below that of the days immediately prior to Christmas. Spending during the three weeks to Christmas Day through core retail merchants, excluding hospitality venues, reached NZ$2.89 billion, a 0.8% increase over pcp and an almost 15% increase on 2019 levels.

Giving a region breakup, Worldline reported that annual spending was the highest on the West Coast, up almost 33%, followed by Southland, which was up 15%, and the Marlborough region showed a 13% rise in spending on Boxing Day.

In this context, it would be interesting to see how retail stocks are performing on the NZX

Briscoe Group Limited (NZX: BGP)

Briscoe is a New Zealand-based company that operates 85 stores across the country. It has three main brands in the homeware, sporting goods, and retail segments. The company announced its third-quarter results on 3 November 2022 in which, it said that it had achieved sales of NZ$175.5 million, up 26.76% over the same period last year. In the same quarter, homeware sales increased by 23.20% to NZ$107.7 million, and sporting goods sales increased by 32.8% to NZ$67.8 million.

According to the release, third-quarter sales last year were impacted by Auckland store closures from mid-August to early November. However, the current Q3 sales represent a lift from the Q3 of 2019, pre-COVID-19 times.

YTD sales from 31 January 2022 to 30 October 2022

The Briscoe Group announced that its unaudited sales for the YTD were NZ$543 million, an increase of 9.37%. In the thirty-nine weeks, the group’s homeware segment increased sales by 8.51%, and the sporting goods segment increased by 10.8%.

Online sales represented 18.25% of the total group sales for the nine-month period. 

On 28 December 2022, the stock was trading up by 1.69%, at NZ$4.26, at the time of writing.

Warehouse Group Limited (NZX: WHS)

A warehouse is a retailing group in New Zealand. The company has six main brands, including Warehouse Stationery, The Warehouse, Noel Leeming, 1-day, Torpedo7, and the market. WHS recently announced that it had entered into a four-year retention arrangement with Group Chief Executive Officer Nick Grayston. Under the retention agreement, Grayston has been awarded 1.6 million share rights in the group. For each share right, the CEO will be issued or transferred, for nil cash consideration and before tax, one fully paid ordinary share on 1 October 2026.  

Further, issuing or transferring ordinary shares would be subject to the CEO’s remaining employed by WHS till 1 October 2026. Further, details of the retention incentives are in the Capital Change Notice relating to the share rights.

On 28 December 2022, the Warehouse stock was trading down 1.06% at NZ$ 2.810, at the time of writing.   

Hallenstein Glasson Holdings Limited (NZX:HLG)

Hallenstein is a specialised retail company for male and female clothing. It operates through more than 120 stores, of which, more than 35 stores in Australia. The joint company was formed in 1985 from the merger of the Hallenstein Brothers and Glassons.

In its Annual General Meeting (AGM on 15 December 2022, CEO Stuart Duncan said that the FY22 was turbulent for the company with trading affected by lockdowns in New Zealand and Australia. In the new financial year, he said, there is more positivity and less disruption from COVID-19-related issues. There have been improvements in sales in New Zealand and Australia, with sales up 41% over last year.

However, the overall results will depend on the trading days ahead. He said in FY23, the company relocated HLG stores in Invercargill with a new concept and furnishings. In Australia as well, the stores have gone through a revamping.

On 28 December 2022, the stock of HLG was trading up 1.69% at NZ$5.430, at the time of writing.

Michael Hill International (NZX: MHJ)

Michael Hill distributes jewelry and other items across New Zealand, Australia, Canada, and the United States.

On 19 December 2022, MHJ announced its share buyback update, saying that the programme, which commenced in September, had to pause for the Company’s blackout period beginning 21 November 2022, when it paused for the critical Christmas trading season. It said that during the buy-back period, the shares acquired and canceled were on the ASX- 4.35 million shares at AU5.1 million and an average share price per share of AU$ 1.18. On the NZX, a total of 4.28 million shares costing N$5.7 million were acquired or sold. The total cash cost to the company was AU$ 10.2 million.

On 19 December, it also announced certain significant reporting dates for FY23.

On 28 December 2022, the stock price of MHJ was trading up 1.75% at NZ$1.160 at the time of writing.