Michael Hill International Limited Analysis

Overview

The Michael Hill story began in 1979 when Sir Michael and his wife Christine opened their first store in the New Zealand town of Whangarei, some 160 kilometres north of Auckland. Since then, the company growth has been guided by a unique retail jewellery formula. Through dramatically different store designs, a product range devoted exclusively to jewellery and development of high impact advertising, Michael Hill Jewellers rose to national prominence. In 1987 Michael Hill International was listed on the New Zealand Stock Exchange, the same year the Group expanded into Australia.

In 2002, Michael Hill expanded into North America, opening its first stores in Vancouver, Canada. The Canadian presence now includes stores in British Columbia, Alberta, Manitoba, Saskatchewan and Ontario.

Exclusive jewellery collections available at Michael Hill stores include Michael Hill Designer Bridal, Infinitas, Everlight and Spirits Bay.

Performance

The following information was extracted from Michael Hill International Limiteds Trading Update, released 27 January 2025:

Michael Hill International Limited (ASX/NZX: MHJ) today provides a trading update for the 26-week period ended 28 December 2025, based on preliminary and unaudited numbers.

Comparable EBIT FY26H1 Group comparable EBIT is anticipated to be in the range of $27m to $30m, up +12% to +24% on LY (FY25H1: $24.1m).

• Group sales For the half, Group sales were $370.3m (FY25H1: $359.1m) delivering growth of +3.1% on LY, and on a same store basis of +3.8%. On a same store sales basis (in local currency), Canada achieved another record sales performance with +6.1% growth, Australia delivered a strong sales performance up +4.8%, and New Zealand reversed previous same store sales declines, growing by +1.8%.
• Gross margin For the half, group gross margin is expected to be broadly flat to LY (FY25H1 61.3%), as record-high gold, silver, and other metal input costs were offset by enhanced overall product mix and focused promotional activity.
• Inventory levels Group inventory levels are expected to be ~$11m lower than LY at ~$203m (FY25H1: $214m), as part of a deliberate plan to improve working capital efficiency.
• Capital Management As previously announced, the business successfully refinanced its existing debt facility on improved margins for an additional two years, with its long-term banking partner, ANZ and introduced a new lender, CBA. The half finished with a positive net cash position of ~$20m, an improvement of ~$30m on LY (closing net debt FY25H1: $10m).
• Store portfolio management The half saw the successful opening of three MH flagship stores, Rundle Mall, Adelaide (refurbishment), Bondi Junction, Sydney (new store) and Yorkdale, Toronto (refurbishment), with all stores incorporating our new brand design and a modernised in-store customer experience. For Michael Hill, three stores were closed (AU: 1, NZ: 2) and one new AU store was opened, taking the network to 248 (AU: 123, NZ: 43, CA: 82). For the half, the Bevilles (AU) store network remained at 37. The Group network was 285 stores at the end of the half across all markets (FY25H2: 287, FY25H1: 294).
• Investor Day The business will host an Investor Day on Tuesday 14th April 2026 at its Global Head Office in Cannon Hill, QLD. More details will be released closer to the date.