WHS, MHJ, KMD: 3 retailers in news as inflation hits over 30-year high

Be the First to Comment Read

WHS, MHJ, KMD: 3 retailers in news as inflation hits over 30-year high

 WHS, MHJ, KMD: 3 retailers in news as inflation hits over 30-year high
Image source: fizkes, Shutterstock.com

Highlights

  • NZ retailers have been missing their sales targets amid the Omicron outbreak in the country, witnessing subsequent lower foot traffic in stores.
  • Annual inflation in NZ hit 6.9% for the year ended 31 March 2022.
  • Warehouse Group, Michael Hill and Kathmandu Holdings are working on building digital capabilities amid the COVID-19 pandemic.

The latest data released by Stats NZ on Thursday showed that the annual inflation in NZ hit 6.9% for the year ended 31 March 2022, up from 5.9% for the year to December 2021. It is the biggest Y-O-Y rise in 32 years and was majorly propelled by the housing and household utilities group, followed by the transport group.

The increase in inflation will further raise the cost of living in the country and may result in further rate hikes by the RBNZ in months ahead. Continued supply chain issues amid the COVID-19 pandemic and huge volatility in commodity prices are some of the other contributing factors to increased inflation in the country.

NZ retailers have been missing their sales targets amid the Omicron outbreak in the country, witnessing subsequent lower foot traffic in stores. They further expect prices to rise even more and have been facing challenges around mandatory mask wearing for the retail staff under current settings.

Amid this backdrop, let’s see how these 3 retailers are doing.

Source: © 2022 Kalkine Media®

The Warehouse Group Limited (NZX:WHS)

Warehouse Group’s market share stood at 6.1% of the total retail sales. In H1 FY22, up by 0.1 point on pcp, its SKU price segmentation programme helped in protecting margins. The Group’s supply chain fared well amid the COVID-19 pandemic, but cost inflation remains an issue to manage.

ALSO READ: MHJ, HLG, KMD- 3 retail stocks to watch as business confidence falls

Food inflation, rising petrol costs and rising interest rates continue to put pressure on Kiwi pockets, subsequently impacting the overall trading environment. WHS is making progress in building an integrated supply chain and is focusing on store pick-up Click & Collect orders as well as building capacity for its customer care tools.

WHS ended the day 1.27% in green to close at $3.2.

Michael Hill New Zealand International (NZX:MHJ)

Michael Hill registered strong results in Q3 despite lower foot traffic and staff rostering challenges amid Omicron. The Group’s all store sales rose 11.1% and same store sales saw an increase of 4.8% in the quarter on pcp.

Must Read: WHS, SCT, KMD- 3 NZX stocks under $5 declaring dividends

MHJ’s sustained margin expansion continued growth in store and digital conversion showcase that its operational reset is working for the company. The business remains centered on delivering key strategic priorities and has put emphasis on improving loyalty program and excellence in retail fundamentals and exploring digital expansion prospects.

MHJ ended the day 0.77% in red to close at $1.29.

KMD Brands Limited (NZX:KMDASX:KMD)

KMD made sales of $407.3 million and a gross margin of 57.7% in H1 FY22 as travel recovered and the COVID-19 impact on supply subsided. It paid an interim dividend of 3cps on 30 June 2022.

Also read: KMD, BGP: 2 NZX retail stocks in news amid upgradation of China FTA

KMD expects to trade without any restrictions in winters with the flip to cold weather in a few weeks and is also likely to benefit from border reopening to Australia.

The Group has also undertaken ESG initiatives to positively impact wider communities and remains focused on elevating its digital capabilities, investing in building global brands in H2 while navigating the COVID-19 impact.

KMD ended the day flat to close at $1.33.

Bottom Line

NZ retailers continue to navigate the COVID-19 impact and remain focused on customer satisfaction and achieving operational growth.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

Disclaimer

Speak your Mind

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK