Michael Hill International, the jewellery retailer with operations in Australia, New Zealand and Canada, said its H1 (ended 31st December 2023) group revenue was up 4% to $362.7 million, due in part to its Bevilles brand acquisition. The sales trend for the core Michael Hill brand improved through the half, however, was still negative to the record first half of FY23.

The company reported comparable earnings before interest and tax (EBIT) of $31.3 million, aligning with prior forecasts.

The group faced pressure on gross margins, which stood at 61.5%, due to amplified input costs for gold and diamonds alongside increased promotional efforts to counter intensified retail competition.

Inventory levels reached $219.8 million, with the upswing attributed to the Bevilles acquisition, while the closing net debt stood at $11.6 million. An interim dividend of AU1.75 cents per share was declared.

Daniel Bracken, the Managing Director & CEO of Michael Hill, said: “There is no doubt that the first half was a challenging period for much of the discretionary retail sector. That being said, we were encouraged by our performance against market data within our category.”

In Australia, the firm’s H1 retail segment revenue increased by 10.2% to $202.3 million. This growth coincided with the opening of four new Bevilles stores, alongside the closure of five Michael Hill stores, culminating in a total of 171 stores by the end of the reporting period, inclusive of 30 Bevilles outlets.

The company’s H1 revenue from New Zealand decreased by 10.3% to NZ$65.4 million, while its Canada revenue increased by 0.5% to CA$88.6 million.

Bracken added: “While the economic conditions and retail environment remain challenging in all markets, we are encouraged by our ongoing performance in Canada as a lead indicator, and early green shoots in Australia in the second half.”