Michael Hill shares drop over profit warning
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More news: Shares in Michael Hill International shed 2.3% to 86 cents in early trading on Friday after the jewellery retailer flagged lower margins amid challenging conditions and said first-half earnings would be sharply lower.
Michael Hill flags lower earnings amid challenging conditions
The news: Jewellery chain Michael Hill International expects first-half earnings to be lower amid difficult trading conditions.
The numbers: The retailer is set to report earnings in the range of $30 million to $33 million for the half-year ending 31 December, down from $54.5 million a year ago. While group sales were up 4.1%, sales for the core Michael Hill brand were negative from a year ago. Shares in the company are down 22% over the past 12 months.
The context: The company said retail conditions for the fine jewellery sector have been challenging throughout 2023, with the macroeconomic environment impacting consumer sentiment. "Clearly margin was under pressure from both input costs and promotional activity, and inflationary forces saw elevated costs across many aspects of the business, which together impacted EBIT for the half," CEO Daniel Bracken said. The company has taken direct actions to reduce operating costs, including the exit of a number of senior management roles, he added.
The source: ASX announcement
