Australia Lockdowns Weigh on Michael Hill Sales

Aug 23, 2021 9:58 AM By Rapaport News

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RAPAPORT... Store closures in Australia have deprived Michael Hill of “significant” revenues since late June and will likely dent profit, the jeweler cautioned this week.

Group sales fell 2% year on year in the first seven weeks of fiscal 2022, which began on June 28, the company said Monday. This reflected the loss of 2,755 trading days during the period, and came despite rising sales in Canada and New Zealand.

Australian authorities introduced tight measures from June onward amid an outbreak of the coronavirus Delta variant. The slowdown will have a negative impact on earnings of around AUD 5 million ($3.6 million) relative to Michael Hill’s expectations prior to the lockdown, the Australian retailer added. Meanwhile, the Covid-19 resurgence is now affecting business in New Zealand, as well, the company said.

“While I’m delighted to see incredibly strong results from Canada following its full reopening, and the resilience of our New Zealand business, the impact of extensive disruptions in Australia and now New Zealand are very concerning,” said Michael Hill CEO Daniel Bracken.

However, Michael Hill reported strong earnings for the full fiscal year that ended June 27. Profit skyrocketed to AUD 45.3 million ($32.5 million) compared with AUD 3.1 million ($2.2 million) a year earlier, when most of its store network was shuttered.

Group revenue for the full fiscal year grew 13% to AUD 556.5 million ($399.6 million), with the jeweler recording a 53% increase in e-commerce sales. Online revenue came to AUD 34.8 million ($25 million), accounting for a record 6% of total full-year sales, the company explained.

A large portion of the growth was due to the company’s transformation strategy, which included increased sales of branded collections, Michael Hill said.

“[We] continue to prioritize product evolution and creating uniquely Michael Hill jewelry, with branded collections now representing 42% of total sales for the year,” the company added.

Image: A Michael Hill store in Australia. (Michael Hill)

Tags: Australia, Daniel Bracken, Jewelry, Michael Hill, Rapaport News