Michael Hill International (MHJ) H1 2025 earnings summary

Executive summary

• Group revenue for FY25H1 was $360.2m, down 0.7% year-over-year, and flat on a constant currency basis.

• Comparable EBIT was $24.1m, at the upper end of guidance but down from $31.3m in FY24H1.

• Statutory net profit after tax rose to $16.9m from $15.4m year-over-year.

• Gross margin improved to 61.3%, supported by product and brand initiatives and higher margin gifting products.

• No interim dividend declared due to compressed earnings and prudent capital management.

Financial highlights

• Gross margin improved to 61.3% (up from 60.6% year-over-year), supported by brand and product initiatives.

• Digital sales reached $30.3m, representing 8.4% of group revenue, up from $29.5m in the prior year.

• Inventory reduced by $6.6m to $213.2m; net debt at period end was $9.8m, improved from $11.6m year-over-year.

• Operating cash flow was $57.7m, up from $22.0m year-over-year.

• Comparable EBIT margin: Australia 11.0%, Canada 15.1%, New Zealand 15.6%.

Outlook and guidance

• For the first seven weeks of FY25H2, group sales increased 1.7% and same store sales rose 3.2% year-over-year; Australia up 3.8%, Canada up 6.7%, New Zealand down 1.9%.

• Strategic focus remains on margin recovery, cost control, and sustainable growth, with a review of the New Zealand segment underway.

• Cost reduction initiatives of ~$5m are being implemented in H2 to align resources with trading performance.