Michael Hill first quarter sales slip

Michael Hill in his flagship Queen St store. Photo / Brett Phibbs

Michael Hill International reported a 0.4 per cent fall in total same store sales to $77.2 million in the first quarter, as its Canadian operations struggled.

Australian same store sales were up 0.2 per cent to $54.5m in NZ dollar terms for the three months to the end of September, compared to a year ago, while in Australian dollar terms same store sales were up 2.3 per cent to A$44.7m.

In this country, same store sales rose 0.6 per cent to $17.2m, while in Canada they fell 8.7 per cent to $5.4m or in Canadian dollars were down 7.2 per cent to $C4.1m.

Total sales from all stores were up 6.3 per cent to $84.6m, but that included figures for Whitehall Jeweler stores in the United States, which Michael Hill took possession of early in September last year.

Chairman Michael Hill said Australia traded well for the quarter, although margins were slightly weaker.

In this country sales were weak in July but rebounded, showing good growth in August and September. Margins in New Zealand were also slightly lower due to promotional activity and the increased use of consumer credit plans.

North America continued to be challenging with Canada struggling for most of the quarter, as economic conditions in the United States dampened Canadian consumer confidence, Mr Hill said.

"We are not expecting this will materially improve in the next quarter."

In the US the clearance of Whitehall's merchandise was largely finished and margins were improving.

"Reaching levels of revenue sufficient to be profitable is still some way off and not expected in the short-term," Mr Hill said.

"The economic situation in the US continues to be difficult with the latest unemployment figures still rising. The company is focused on improving the US business and up to three stores should be refurbished in the new store look prior to Christmas."

US all store sales in the latest quarter were US$1.8m or $2.6m.

Australian all store sales were up 6.2 per cent to A$44.6m or up 4.1 per cent to $57.8m, in this country all store sales were up 1 per cent to $17.5m, while in Canada they were up 10.1 per cent to $C5.1m or up 8.2 per cent to $6.7m.

The figures represented two months accounting adjusted sales results, plus September preliminary sales figures before final accounting adjustments.

- NZPA