Michael Hill International reported a 2% rise in group sales and a comparable EBIT increase of up to 57% for FY26, driven by strong performances in Canada and Australia alongside disciplined cost management.
- Group sales increased 2.0% to $654.7 million
- Same store sales up 3.0% with Canada leading at 7.0%
- Comparable EBIT forecast between $22.0m and $24.0m, up 44%-57%
- Store network trimmed by six locations, closing eight and opening two
- Strong second-half acceleration in New Zealand same store sales
Sales Growth Driven by Canada and Australia
Michael Hill International (ASX:MHJ) has posted a modest 2.0% increase in group sales for the 52 weeks ended 28 June 2026, reaching $654.7 million. While the headline growth appears steady, the underlying momentum is more nuanced. Same store sales (SSS) rose 3.0% overall, with Canada leading the charge at a robust 7.0% increase in local currency, marking another record performance for the market. Australia, including the Bevilles brand, delivered a solid 4.8% rise in SSS, while New Zealand saw a notable acceleration in the second half, finishing the year with a 3.6% gain.
Profitability Surges on Stable Margins and Cost Control
More striking than sales growth is the anticipated jump in comparable EBIT, which Michael Hill expects to land between $22.0 million and $24.0 million; an increase of 44% to 57% compared to $15.3 million in FY25. This uplift reflects not only the sales gains but also disciplined cost management amid inflationary pressures and stable margins. The company’s focus on operational efficiency appears to be paying dividends, supporting a stronger bottom line despite a challenging retail environment.
Store Network Streamlining Continues
Michael Hill trimmed its store network by six locations during the year, closing eight stores across Australia (4), Canada (2), and New Zealand (2), while opening two new stores in Australia and Canada. The total store count now stands at 281, down from 287 the previous year. This selective pruning aligns with the company’s ongoing strategy to simplify its footprint and sharpen focus on its core brands, Michael Hill and Bevilles.
Currency Tailwinds and Market Dynamics
The sales growth on a constant currency basis was stronger, with group sales up 3.9% and same store sales up 5.2%, indicating that favourable exchange rates; particularly the Canadian dollar appreciating against the Australian dollar; provided a tailwind to reported results. Canada’s currency moved from 0.90 to 0.94 CAD/AUD, while New Zealand’s dollar strengthened from 1.10 to 1.16 NZD/AUD during FY26. These currency moves amplify the underlying operational performance when converted to Australian dollars.
CEO Signals Confidence Ahead of Full-Year Results
CEO Jonathan Waecker expressed satisfaction with the year’s performance, highlighting the team’s passion and customer service as key drivers. He noted the acceleration in Canada and New Zealand sales in the second half and reaffirmed the company’s commitment to its streamlined brand strategy. Waecker indicated that the company is entering FY27 with a clear plan and confidence in future opportunities, with detailed full-year results scheduled for release on 28 August 2026.
Bottom Line?
Michael Hill’s FY26 results reveal a company gaining traction through targeted growth and cost discipline, but the upcoming full-year report will be critical to confirm sustainability amid ongoing market headwinds.
Questions in the middle?
- Will Michael Hill sustain its EBIT growth momentum into FY27 amid inflationary pressures?
- How will the streamlined store network impact long-term sales and brand presence?
- What role will currency fluctuations play in translating overseas operational gains into reported earnings?