Slow sales for Michael Hill at Christmas

Posted January 14, 2013 | By Emily Mobbs • Former Editor

Fine jewellery chain Michael Hill International has released its six-month trading update, indicating flat sales in the final quarter of 2012.

According to a company statement to the New Zealand Exchange, sales growth stalled in the second quarter, which limited earnings growth in the first half of the year.

“December quarter sales, including the critical Christmas trading period, fell short of our forecasts and didn’t deliver the improvement over the last year that the company had expected,” chairman Sir Michael Hill said in the statement.

Michael Hill chief financial officer Phil Taylor told Jeweller: “Both New Zealand and Australia [markets] were difficult for us over the December quarter and Christmas itself was tougher than expected”.

Earnings before interest and tax in the six months ended December 31 are expected to be in the range of $27.1 million (NZ$34 million) to $28.6 million, from $27.7 million the previous year.

The company, which has more than 240 stores throughout Australia, New Zealand, Canada and the United States, has reported a rise in total “same store” sales of just 2.6 per cent for the past six months.

The statement claims: “However, while all four markets struggled to gain traction over last year’s sales in the second quarter, it is still pleasing that all four markets achieved solid ‘same store’ sales for the half year”.

Michael Hill is the first NZX 50 company to give an earnings update ahead of the results season that kicks in next month.