Michael Hill International reported a 1.9% revenue increase to $655.7 million in FY26, with comparable EBIT up 57% to $24 million and net profit soaring 376%. The company restored dividends and announced a Chair succession.
- Record group revenue of $655.7 million, up 1.9%
- Comparable EBIT increased 57% to $24 million
- Net profit after tax surged 376% to $10 million
- Final dividend of 2.0 cents per share declared
- Chair succession announced with Claudia Batten to succeed Rob Fyfe
Turnaround Strategy Delivers Record Results
Michael Hill International (ASX:MHJ) has posted its strongest financial performance in years, with group revenue reaching a record $655.7 million for the 52 weeks ended 28 June 2026, up 1.9% on the prior year and 4.1% on a constant currency basis. The company’s strategic turnaround plan, focused on simplifying its brand portfolio and sharpening retail execution, has propelled comparable earnings before interest and tax (EBIT) up 57% to $24 million. Net profit after tax surged 376% to $10 million, marking a significant rebound from the previous year’s $2.1 million.
The results reflect broad-based growth across all markets; Australia, Canada, and New Zealand; with same store sales increasing 3.0% overall and 5.2% on a constant currency basis. Canada led the charge with a 7.0% same store sales uplift, followed by Australia at 4.8%, and New Zealand accelerating to 3.6% growth in the second half of the year. Online sales continue to gain traction, now accounting for 8.7% of total revenue, with the Michael Hill brand’s digital channel growing 10% in constant currency and Canada’s online sales soaring 22%.
Margin Resilience and Cost Discipline Underpin Profit Growth
Despite elevated precious metal costs, including multiple record highs for gold prices, Michael Hill maintained a stable gross margin of 60.5%. This was achieved through disciplined pricing and a stronger product mix. The company also improved operating leverage by reducing its Cost of Doing Business (CODB) as a percentage of revenue by 70 basis points to 57.1%, reflecting tight cost management even amid inflationary pressures.
Inventory management was another highlight, with stock levels reduced by $9.4 million to $189.7 million, a 4.7% decrease that boosted inventory productivity by 13%. The Group’s partnership with Impact Analytics to deploy AI-driven demand forecasting and merchandise allocation is expected to further enhance inventory efficiency in FY27.
Brand Simplification and Store Network Optimisation
Michael Hill’s strategic simplification saw the Group focus exclusively on its two core brands, Michael Hill and Bevilles, closing non-core brands Medley and TenSevenSeven. This move led to a $6.1 million non-cash write-off excluded from comparable EBIT but simplified the operating model and concentrated resources on profitable growth.
The store network stood at 281 at year-end, down six from 287, reflecting ongoing optimisation. The company opened four flagship stores, including new and refurbished locations in key markets such as Bondi Junction (Sydney), Rundle Mall (Adelaide), Yorkdale (Toronto), and Pacific Centre (Vancouver). These stores feature a refreshed brand design and modernised customer experience, delivering improvements in transaction values and conversion rates above the network average.
Segment Highlights: Australia, Canada, and New Zealand
Australia, the largest market, posted a 2.5% revenue increase to $371.8 million and a 4.8% same store sales rise. Gross margin improved by 130 basis points to 60.7%, supporting a 34.4% jump in comparable EBIT to $36.3 million. Bevilles, after a challenging first half, rebounded strongly in H2 with same store sales up 5.8% and a 660 basis point margin increase.
Canada delivered another record year with 7.3% revenue growth to CA$174.2 million and 7.0% same store sales growth. The segment’s gross margin improved slightly to 60.3%, driven by targeted go-to-market strategies and strong bridal sales. Comparable EBIT rose 16.3% to CA$21.9 million. The company opened a new flagship store in Vancouver and plans further modernisation of top stores in FY27.
New Zealand showed a marked acceleration, with revenue up 3.1% to NZ$112.4 million and same store sales growth of 3.6%. The segment invested in customer-facing initiatives, maintaining a gross margin of 58.0%. The store count fell to 43 following two closures, with plans for further expansion in FY27.
Balance Sheet Strength and Dividend Restoration
Michael Hill’s balance sheet strengthened significantly, with net debt reduced by $36.3 million to $5.5 million. This improvement was driven by disciplined working capital management, stronger cash flows from improved sales and margins, a one-off Australian income tax refund of $7.5 million in H2, and better supplier terms.
Reflecting this improved financial position and operational momentum, the Board declared a final dividend of 2.0 cents per share, partially franked. This marks the first dividend since FY24 and signals renewed confidence in the company’s turnaround progress.
Leadership and Board Changes
The company announced a planned Chair succession, with current Deputy Chair Claudia Batten set to succeed Rob Fyfe as Chair effective 28 November 2026. Batten brings extensive experience in technology and governance, complementing the Board’s ongoing renewal. Two new Non-Executive Directors, Karen Bozic and Mark Bayliss, have also been appointed to strengthen retail and governance expertise.
Looking Ahead: FY27 Strategy and Early Trading
Michael Hill enters FY27 with a clear focus on profitable growth, leveraging four key levers: stronger store productivity, sales growth, steady margins, and further cost reductions. The company plans to invest approximately $25 million in capital expenditure and SaaS projects, prioritising store refreshes and AI-driven inventory planning.
Early trading in FY27 is encouraging, with group same store sales up 4.4% on a constant currency basis in the first eight weeks. Canada leads with 9.8% growth, followed by New Zealand at 3.3% and Australia at 1.7%. Gross margins have also strengthened over the prior year, supporting expectations of continued profitable growth.
Bottom Line?
Michael Hill’s FY26 results confirm the turnaround is gaining traction, but sustaining momentum will depend on execution of its growth engines and navigating ongoing economic pressures.
Questions in the middle?
- Can Michael Hill sustain its margin resilience amid fluctuating precious metal costs?
- How will the new Chair and board appointments influence strategic priorities?
- What impact will increased AI-driven inventory management have on sales and cash flow?