Michael Hill: Not an issue in sight

Jewellery retailer Michael Hill International (ASX: MHJ) expects first half sales for FY22 between $49m and $53m, representing 9.9% to 18.8% growth compared to the previous period.

While still subject to audit, the figure runs ahead of its 29 December 2021 update, which expected first half sales of $44.6m. 

The company has managed to grow against all odds, flagging 2,381 lost store trading days in the second quarter to 26 December 2021 versus 1,551 lost in the previous period. 

Group all store sales rose 9.8%, meaning that when stores were open, sales were bustling. 

The worst might be behind Michael Hill, with all its network stores across Australia, New Zealand and Canada trading at the end of the December quarter.

Complementing the tenacity of its retail stores, further omni-channel initiatives drove a 28% increase in digital sales. Year-to-date, online sales represented 8.2% of total sales compared to 6.3% in FY21. 

When the pieces come together 

Daniel Bracken CEO said this was the best Q2 in the company’s history, underpinned by a successful Christmas trading period. 

“This strong performance now marks our tenth quarter of positive same store sales growth since FY19 Q3 and further demonstrates the success of the continued transformation of the Michael Hill brand," said Bracken.

Encouragingly, there was no mention of either supply chain or labour shortage related issues in today's announcement.

Instead, the company reiterated that “disciplined inventory management, robust cost controls and strong sales led to a healthy cash position at the end of the quarter”. 

All priced in?

Michael Hill shares are seeming unfazed by the positive news, trading flat at noon.

Then again, the stock has been running hot, up 110% in the past 12 months.

Michael Hill 12-month chart