New Zealand-born jewellery group Michael Hill has reported a 376 per cent lift in profits in FY26 alongside a modest lift in overall sales.
Michael Hill International – which manages the Michael Hill retail brand and lower-price jeweller Bevilles – has seen its profits lift by $7.9 million to $10 million, alongside a 1.9 per cent lift in total sales to $655.7 million. On a constant currency basis, sales lifted by 4.1 per cent.
Same store sales grew by 3 per cent on the prior year, and up 5.2 per cent on a constant currency basis, with all three of Michael Hill’s core geographies growing.
Canada saw the strongest comp sales growth, up 7 per cent, with Australia up 4.8 per cent and New Zealand up 3.6 per cent. On NZ, Michael Hill noted its comp sales lift accelerated from the second quarter.
"Michael Hill was founded on the simple idea that everyone deserves to wear quality jewellery and feel special wearing it, and this year we returned to that focus,” CEO Jonathan Waecker said. “We're listening more closely to our customers and our teams, we've simplified the business, and we've doubled down on quality jewellery made to be worn and given with confidence.
“As a result, sales are up across every market, profitability has improved sharply, Bevilles gained traction with a clear inflection between the halves, and we've restored the dividend. The turnaround is taking hold, there's still plenty more for us to do, and I'm incredibly proud of what our teams have delivered through a year of significant change."
Across its performance, Michael Hill saw a 57 per cent growth in its comparable earnings before interest and tax (EBIT), hitting $24 million, with the group citing stronger sales, resilient gross margins despite elevated gold input costs, and disciplined management of operating expenses in an inflationary environment.
“These factors combined to improve operating leverage, increase cash generation and strengthen returns,” the company reported.
Online sales grew 10 per cent on a constant currency basis, and now make up 8.7 per cent of total revenue contribution. This is materially ahead of the physical network, with Canada being the standout with 22 per cent growth.
“Our digital channel is now by far the largest store in the Michael Hill brand and is increasingly where customers discover and buy,” the group reported, adding that online sales growth was driven by improvements to the digital experience, which lifted both conversion and average transaction values.
“With penetration still below that of many comparable peers, management believes there is significant runway for further growth.”
Michael Hill’s bottom line was buoyed by a 70 basis point drop in the company’s cost of doing business (CODB) as a percentage of revenue, hitting 57.1 per cent.
According to the group, this improvement reflected disciplined cost management, which enabled reinvestment in teams. Michael Hill’s proprietary Retail Assist AI now powers over 50 per cent of all retail support enquiries, the group added, providing instant knowledge to teams to better focus on customers.
The bump up in profits and revenue came despite the company’s decision to close its Medley and TenSevenSeven brands. As a result, the group recognised non-cash write-offs of $6.1 million, largely relating to the closure of the two entities which has been excluded from comparable EBIT.
Michael Hill ended the year with closing net debt of $5.5 million, dramatically down from the $41.9 million in FY25.
The jewellery group issued a trading update on FY27, reporting continued momentum in same-store sales for the first eight weeks of the new financial year.
Group same-store sales lifted 4.4 per cent on a constant currency basis, while flat in AUD.
The Canadian segment grew 9.8 per cent on last year, while the Australian segment rose 1.7 per cent, and New Zealand lifting 3.3 per cent. Management expects continued profitable growth through the year.