Michael Hill has reported a group revenue decline of 8.8% for the three months to September 30.
Same store sales were also down by 11% for the period.
Michael Hill International CEO Phil Taylor said the decline was partly due to a new pricing strategy.
The retailer underestimated the level of marketing activities required to shift away from a reliance on discount based pricing.
“During the quarter and in line with our strategy, the group increased gross profit margin as it reduced its reliance on discount based events.
"However, on review, this shift was not adequately supported by sufficient levels of marketing and promotional activities to drive top-line sales.
"We are confident that our strategy to improve gross margin as we reduce the level of discounting and price based events, is the right strategy and will ultimately result in a brand and product that are more valued by our customers."
Gross margin lifted to 64.6% for the quarter, up from 63.1% in the prior year.
eCommerce sales increased 84.9% to $3.5 million for the quarter and now represent 3% of total sales gor the group.