Published 11 January 2009
Listed jeweller Michael Hill International Ltd opted for sales over margin in December because of economic uncertainty, chairman Michael Hill said on Friday in a trading update for the December half.
“December sales targets were difficult to achieve in the tough retail conditions we were facing, especially in New Zealand & Canada. Margins for the group will be significantly lower for the half due to exchange rate deterioration on inventory purchases and also due to the difficult conditions that necessitated us going on “sale” in all markets earlier than normal.
“A conscious decision was made to target sales at the expense of margins due to the uncertainties of the current economic climate. Managing inventories & cashflow was seen as a priority.“With lower margins & several one-off costs associated with the US acquisition & internal restructuring, the first-half trading result (excluding restructure tax benefits) will be materially below last year’s record interim result of $19.45 million. The interim result will be released on 20 February.”
Same-store sales, in local currency, were up 1.2% in Australia to $A113.7 million, down 9.3% in New Zealand to $48 million, down 10.4% in Canada to $C10.1 million.
For all stores, local currency, Australian sales rose 5% to $A125.4 million, New Zealand sales fell 7.6% to $49.6 million, Canadian sales rose 3.9% to $C14 million and the new US division achieved $US4.1 million of sales. Transferred to $NZ, total same-store sales were down 1% to $198.9 million but all-store sales rose 8.7% to $226.9 million.Want to comment? Email [email protected].
Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.