The Michael Hill International jewellery chain has reported a small drop in ‘same store’ sales in Australia in the second half of 2011.
According to an official statement released by Michael Hill, retail had been “challenging” in Australia (its largest market) during this period but the Group had experienced some solid ‘same store’ sales growth in New Zealand, Canada and the United States.
Same store sales in Australia dropped 0.5 percent from NZ$178.2 million to NZ$177.4 million in the six months to December 31 while they rose 9.9 percent to NZ$59.8 million in New Zealand, 2.1 percent to NZ $25.7 million in Canada and 16.4 percent to NZ$6.6 million in the US.
“The difficult market in Australia also put pressure on our margins during the second quarter which will adversely impact on profits for the half year.”
Nonetheless, despite the “difficult trading” in Australia, the group’s cash flow “remained strong” and the success of its Professional Care Plan service, which was launched in October 2010 and provides for the ongoing maintenance and care of jewellery, is “very encouraging”.
Michael Hill International’s total sales for the six months were NZ$287.7 million − a 7.2 percent increase on the same period in 2010.
The Group said half-year earnings before interest and tax were expected to be in the range of NZ$33 million to NZ$35 million, compared with NZ$32.3 million in the corresponding period last year.
Michael Hill International’s full half year results for the six months ending December 31 2011 are due to be released to the New Zealand Stock Exchange on February 16.