Michael Hill has announced an increase in operating revenue in FY22 by 7.0% to $595.2m, despite 10,020 lost trading days due to COVID lockdowns across ANZ.
The company’s same store sales were up 8% for the year, with Australia up 4.2%, New Zealand up 8.9% and Canada up 11.3%.
Michael Hill noted a decline in retail segment revenue by 2.8% to $303.4 million for the year. The company cited lockdowns and the closure of under-performing stores as major contributing factors.
Government lockdowns in Victoria, South Australia, Australian Capital Territory and New South Wales, led the company to losing 7,551 store trading days FY22. In the previous financial year, this number was at 3,458 for Australia.
Despite the decline in retail revenue, the Australian portfolio delivered expanded gross margin for the year to 64.8% (FY21: 62.1%), the country’s highest margin in the last five years.
The New Zealand market posted a similar performance for the fiscal year.
Same store sales increased by 8.9%, but temporary store closures due to government mandates saw a decline in retail segment revenue of 1.6% to NZ$125.1 million for the year.
The government mandated store closures, predominantly in the Auckland region, resulted in 2,241 lost store trading days (FY21: 464) during the year.
Gross margin for the year was 63.4% (FY21: 62.0%), a strong year on year performance, and significant improvement on both FY19 and FY20.
During the year one store closed in NZ, resulting in 48 stores at year end (FY21:49).
Including Canada, this brings Michael Hill’s total store count to 280, down from 285 in FY21.
For the company overall, Michael Hill’s digital sales had increased by 23% to $42 million - a record for the company. This represents 7.1% of total sales, up from 6.3% last year.
Its comparable earnings before interest and tax (EBIT) increased by 11.1% to $62.9m (FY21: $56.6m).
Michael Hill MD and CEO Daniel Bracken said the results are positive, “especially considering the considerable disruptions we faced across Australia and New Zealand in the first half.”
“A key highlight was our ability to grow profit faster than sales, with gross margin expansion driven by strategic initiatives across product, stores, digital and loyalty,” Bracken said.
“These results demonstrate that we have successfully shifted the emphasis from transformation to growth, as we continue to elevate and modernise the Michael Hill brand.”
Michael Hill’s loyalty strategy delivered with 76% of sales from members. Its program, called Brilliance by Michael Hill, now has over 1.4 million members (FY21: ~800,000).
“I am particularly proud of our people and the culture that we continue to build at Michael Hill – a high performance team across all levels, with an energy and passion that underpins our growth agenda.
“ This culture is best evidenced by the sensational performance from our Canadian team in FY22 delivering huge lifts in productivity, sales and margin.”
In the first eight weeks of FY23, Michael Hill has delivered strong early performance, with Group all store sales up 13.4% against the same period in FY21.