Michael Hill says discounting is hurting margins

Michael Hill

Michael Hill International is living with lower profit margins, care of discounting in the difficult retail environment.

The jeweller said today it was continuing to cut costs to offset the lower margins and the US continued to be a tough market to operate in.

The comments accompanied sales figures for the nine months.

Total all store sales were up 9.9 per cent on a year ago and same store sales were up 1.9 per cent when reported in New Zealand dollars.

A geographic breakdown showed New Zealand all store sales were down 7.1 per cent and same store sales were down 8.5 per cent.

Australia performed better with all store sales up 10.1 per cent and same store sales up 6.4 per cent.

Canada was also strong, registering a 15.2 per cent rise in all store sales and 0.5 per cent rise in same store sales.

Comparisons were not given for US stores, which registered $10.9 million of sales in the nine month period.

The company reported earnings before interest and taxation of $21.31m at its interim, which was down 30 per cent on the same period last year.

Its net profit before tax was $17.892m, was down 37 per cent on the same period last year.

The company purchased 17 US stores in a bankruptcy sale, which produced an operating loss in their first four months.

- NZPA