Solid online sales continue to help jewellery retailer Michael Hill to survive the continuing vicissitudes of the coronavirus pandemic here and offshore.
The company told the ASX on Thursday in an update that headline sales for the first 22 weeks of the year were up 7.9% on a comparable store basis, as against a 1.3% fall in topline sales.
But same-store sales in October and November were up 8.5% year-on-year indicating continuing momentum.
That saw the shares jump more than 11% at the opening on what was a weak day overall.
They continued improving through the session and closed up more than 18% at 64 cents.
That’s the highest the shares have been since before the pandemic set in last February.
The dip in topline sales was due to the impact of stores shut due to lockdowns in markets such as Melbourne, and currently across Canada where 14 of the company’s outlets remain closed.
Online sales, a newish channel for the mostly shopping mall-based chain surged 110% for the period and more than made up for the impact of the store closures.
“Across all channels and segments, the Company has delivered strong results for October and November, continuing on the solid growth in sales and margin from the first quarter,” CEO Daniel Bracken said in the update
“In addition to this impressive top-line performance, the Company continues its unwavering focus on costs, and has worked diligently to deliver strong improvements in its cash and balance sheet position.”
The company reported an increase in gross profit thanks to a 2% rise in Michael Hill’s margins after the company focused on costs during the pandemic.
It now expects interim earnings for the December half to be materially above the $31.6 million in EBIT it recorded for the first half of the 2019-20 financial year.
Online sales, a relatively new channel for the traditional bricks and mortar merchant, also grew, up 110 per cent for the period.
“Across all channels and segments, the Company has delivered strong results for October and November, continuing on the solid growth in sales and margin from the first quarter,” chief executive Daniel Bracken said.
Despite the strong figures, the retailer cautioned investors on the coming Christmas trading period, noting it still had concerns about future COVID-19 outbreaks and lower foot traffic due to the virus.
