Full Year 2024 Michael Hill International Ltd Earnings Call Transcript
Key Points
- Michael Hill International Ltd (ASX:MHJ) reported a 4% increase in revenue to $645 million on a 52-week basis, including the Bevilles acquisition.
- Digital sales grew by 16% to $48 million, reflecting the success of the company's omnichannel strategy.
- The company successfully launched new brands and expanded its store network, including the opening of a global flagship store at Chadstone.
- The Michael Hill loyalty program, Brilliance, now has over 2.5 million members, contributing to higher average transaction values and gross margins.
- The company demonstrated a strong commitment to sustainability with initiatives like gold recycling, jewelry repairs, and the launch of the Michael Hill Foundation.
- Comparable earnings before interest and tax (EBIT) declined to $15.9 million, impacted by lower gross margins and inflationary cost pressures.
- Gross margin fell to 16.6%, driven by higher input costs for gold and mined diamonds, as well as increased competitive activity.
- The New Zealand segment experienced a significant revenue decline of 11.8% on a 52-week basis, with security incidents impacting earnings by approximately $5 million.
- The company decided not to declare a final dividend for FY24 due to compressed earnings and a focus on prudent investment.
- Inflationary cost pressures affected operating expenses, particularly store labor and occupancy costs, leading to measures to reduce discretionary spend and overheads.
Good morning. Thank you for joining Michael Hill International's FY24 full-year results update. I'm Daniel Bracken, CEO, and I'm here today with Andrew Lowe, our CFO.
Today, we will be taking you through a review of our FY24 results, current trading updates, and providing you with further insights on the group's strategy before ending with a Q&A session. There is no doubt that FY24 was a challenging period for the business as we cycled record performance and tough retail trading conditions continued driven by low consumer confidence and macro-economic pressures.
Notwithstanding the difficult conditions, it is pleasing to see external third-party transactional data, demonstrating that Michael Hill is performing better than the broader jewelry market and taking market share. Clearly, margin was under pressure from both input costs and promotional activity due to the market conditions with inflationary forces driving elevated costs across many aspects of the business, which together
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