Michael Hill International Limited (ASX:MHJ) FY25H1 Trading Update
Sales Performance
Michael Hill International Limited (ASX: MHJ) has reported a challenging FY25H1, impacted by macroeconomic pressures and consumer sentiment. Group sales reached $359.1 million, a decrease of 1% from the previous year. Notably, comparable EBIT is projected between $22.5 million and $24 million, down from FY24H1’s $31.3 million.
Regional Highlights
In terms of regional performance, Canada saw a 2.7% increase in same-store sales, while Australia reported a modest 0.6% growth. Conversely, New Zealand experienced a significant decline of 7.8% due to adverse economic conditions.
Gross Margin and Digital Growth
Michael Hill’s gross margin is expected to improve, forecasted between 61% and 61.5% for the half. This improvement comes despite ongoing input cost pressures and competitive retail conditions. Digital sales have also seen growth, accounting for 8% of total sales, bolstered by successful omni-channel initiatives.
Inventory and Capital Management
Inventory levels were well-managed, projected to be approximately $5 million lower than the previous year at $215 million. The company’s closing net debt is reported at about $10 million. Management is targeting $5 million in cost reductions for the second half to better align with strategic priorities.
Store Expansion
During the half, Michael Hill opened a flagship store in Melbourne and refurbished a location in Queenstown, ensuring alignment with new brand initiatives.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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