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Michael Hill Profit Slumps on US Exit

Store-closure costs lead to 90% drop.
Aug 28, 2018 7:11 AM   By Rapaport News
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Michael Hill saw its earnings dive 90% in the last fiscal year, due to costs relating to its exit from the US market and the closure of its Emma & Roe brand.

The Australia-based jeweler reported profit of $3.4 million (AUD 4.6 million) for the year that ended June 30, weighed down by a one-time payment of $18.7 million (AUD 25.5 million) associated with closure costs. Excluding those fees, profit fell 21% to $25.5 million (AUD 34.8 million), the company reported Sunday.

“The period was one of recalibration and repositioning for the group, which included the exit of the US and Emma & Roe businesses,” said CEO Phil Taylor.

The company’s decision to close its US and Emma & Roe businesses followed a strategic review, which shifts the focus to its three remaining markets as well as building its online presence.

Group revenue rose 4.4% to $422.3 million (AUD 575.5 million), and same-store sales — at branches open more than one year — edged up 0.4% to $386 million (AUD 526 million).

Revenue in Australia grew 1.2% to $239 million (AUD 325.7 million), while in New Zealand it increased 2.7% to $91.9 million (NZD 125.2 million). Canada was the company’s strongest performer, as revenue rose 16% to $101 million (CAD 130.8 million). Meanwhile, e-commerce sales for the year increased 57% to $7.6 million (AUD 10.3 million).

Michael Hill operated 312 stores at the end of the fiscal year, including six remaining Emma & Roe stores, which it will close in the coming months.

Image credit: Wpcpey
Tags: Emma & Roe businesses, Michael Hill, Rapaport News
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