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 Half year results, released 03 March 2026.

KEY FINANCIAL RESULTS

• Comparable EBIT* of $31.0m, up +28.6% on prior year.
• Group sales of $371.0m, up +3.0% on prior year.
• Same store sales (SSS) growth of +3.8% on prior year:

Canada achieved another record sales performance with SSS growth of +6.1% on prior year.

Australia delivered a strong sales performance with SSS growth of +4.8% on prior year.

New Zealand reversed previous SSS declines, growing by +1.8% on prior year.

• Gross margin broadly flat at 61.2%, as increases in gold, silver, and other metal input costs were offset by enhanced overall product mix and focused promotional activity.
• Group inventory levels reduced by $11.3m to $201.9m, a reduction of -5.3% on prior year.
• Group net cash position of $20.7m at the half, a $30.5m improvement on the ($9.8m) net debt position at the prior year.
• The Board has decided that no interim dividend will be declared for the half year, however the Board intends to return to dividends at the full year results, subject to current trading conditions continuing and in line with the Company's dividend policy.

*Comparable EBIT is unaudited non-IFRS information. Please refer to unaudited non-IFRS information section in this report for an explanation of unaudited non- IFRS information and a reconciliation of Comparable EBIT.

FY26H1 GROUP BUSINESS PERFORMANCE

The Group delivered a materially stronger operating performance in FY26H1, with comparable earnings before interest and tax increasing 28.6% to $31.0m for the half year ended 28 December 2025. The uplift was primarily driven by higher sales volumes, which generated an additional $6.3m in gross profit. This outcome reflects renewed go-to-market initiatives with product and pricing playing a key role to partially offset continued pressure from elevated input costs - particularly gold. Importantly, disciplined cost management ensured operating expenses were controlled in an inflationary environment, enhancing operating leverage and contributing to the improvement in earnings.

For the half, the Group delivered revenue of $371.0m, up 3.0%, supported by solid performances in Australia and Canada and a return to positive sales growth in New Zealand. Group same store sales increased by +3.8% in local currency, reflecting excellence in execution of product, brand and promotional initiatives.

Gross margin remained broadly in line with the prior year at 61.2%, as record high gold and silver input costs were effectively offset by enhanced product mix and disciplined pricing execution.

During FY26H1, our product initiatives played a meaningful role in supporting trading performance. The introduction of new collections including Vermeil, Lume LAB and the Earring Bar - aimed to drive customer interest and maintain brand freshness, while the continued broadening of our Pendant Bar range further enhanced the instore experience, supporting customer engagement. At the same time, our focus on showcasing exceptional quality at attainable price points strengthened our overall value proposition. Complementing these initiatives, the expansion of our curated Christmas gift sets ensured we met diverse customer needs during peak gifting periods, supporting momentum across our major markets throughout the half.