Michael Hill says sales are surging in pandemic as customers move online
In a trading update on Wednesday, the Queensland based chain said same store sales growth for the first quarter of the 2021 financial year were up 7.3 per cent, despite experiencing “double digit” decline in foot traffic across its network of stores.
A large number of the retailer’s stores remain closed due to restrictions in Melbourne and Auckland.
Michael Hill noted online sales were up 129 per cent compared to first quarter in the prior financial year, predominantly coming off the back of consumers rapidly adopting online shopping.
The company said sales margin growth across all channels had increased between 100 and 200 basis points, with gross profit growth outpacing sales.
Michael Hill chief executive Daniel Bracken said the uplift has positioned the company well for the Christmas trading period.
“Our emphasis has shifted from a focus on top line sales and market share recovery, to a balance of both margin and sales growth, underpinned by our strategic initiatives,” he said.
“A well-managed supply chain, an exciting merchandise offer, and our best ever Christmas marketing campaign provide confidence that we can maintain strong momentum across the most significant quarter of the year.”
Due to ongoing restrictions, 44 out of 289 stores were closed during the quarter due to COVID-19 restrictions, 28 of them in Melbourne and 16 in Auckland.
Mr Bracken said it has accelerated virtual selling and try-ons while the pandemic continues to impact physical retailing.
“To navigate the impacts of the pandemic, the company has put in place a number of measures — strong health and safety protocols, accelerating virtual selling and try-ons and rolling out multiple digital initiatives,” he said.
The company said online sales now represent 5.3 per cent of its total global sale.
Revenue from same store sales during the period were $116.7 million, with the strongest uplift experienced within its Australian operations.
Australian same store sales growth increased 12.5 per cent, while New Zealand and Canadian like-for-like sales rose 4.7 per cent and 5.9 per cent respectively.
Michael Hill said there has been a rapid adoption of its branded collection and an almost 81 per cent lift in its loyalty program.