Michael Hill International delivered a landmark FY26 with record revenue of AU$655.7 million, a 57% jump in comparable EBIT, and reinstated dividends after a strategic turnaround.
- Record group revenue of AU$655.7 million, up 1.9%
- Comparable EBIT surged 57% to AU$24.0 million
- Statutory net profit after tax rose 376% to AU$10.0 million
- Same store sales growth across Australia, Canada, and New Zealand
- Final dividend restored at 2.0 cents per share
Michael Hill’s strategic reset fuels record financial results
Michael Hill International (ASX/NZX:MHJ) has marked FY26 with a significant turnaround, posting record revenue of AU$655.7 million, a 57% leap in comparable EBIT to AU$24.0 million, and a 376% increase in statutory net profit after tax to AU$10.0 million. This performance has enabled the company to restore its dividend, declaring a final payout of 2.0 cents per share, partially franked.
The company’s CEO Jonathan Waecker attributed the results to a sharpened focus on the core Michael Hill and Bevilles brands, operational simplification, and a renewed commitment to customer experience. "Sales are up across every market, profitability has improved sharply, Bevilles gained traction with a clear inflection between the halves, and we've restored the dividend," Waecker said, highlighting the momentum despite ongoing macroeconomic challenges.
Growth across all key markets and channels
Same store sales (SSS) grew 3.0% overall, with Canada leading the charge at 7.0%, Australia delivering a solid 4.8%, and New Zealand accelerating to 3.6% growth. Online sales, a key growth engine, expanded to 8.7% of total revenue, driven by a 10% constant currency increase in the Michael Hill brand and a standout 22% growth in Canada. The digital channel is now the largest 'store' for Michael Hill, reflecting a shift in customer buying behaviour.
Gross margin held steady at 60.5%, a notable achievement given elevated precious metal costs including record-high gold prices. The company’s disciplined pricing and improved product mix helped offset these cost pressures while maintaining margin resilience amid consumer cost-of-living concerns.
Operational efficiency and inventory management
Michael Hill trimmed its Cost of Doing Business (CODB) ratio by 70 basis points to 57.1%, reflecting tight expense control and reinvestment in team capabilities. The proprietary Retail Assist AI system now supports over half of all retail enquiries, enhancing frontline customer service.
Inventory levels fell by 4.7% to AU$189.7 million, with a 13% improvement in Gross Margin Return on Investment (GMROI), driven by better stock productivity and clearance sell-through. The company partnered with Impact Analytics to deploy AI-driven demand forecasting, aiming to further optimise inventory allocation.
Retail segment highlights and store network changes
Australia, including the Bevilles brand, saw revenue rise 2.5% to AU$371.8 million with SSS up 4.8%. Gross margin improved by 130 basis points to 60.7%, underpinning a healthy increase in comparable EBIT. Bevilles showed a turnaround with second-half SSS growth of 5.8% following a first-half decline, alongside a 660 basis point gross margin improvement.
Canada recorded a 7.3% revenue increase to CA$174.2 million and 7.0% SSS growth, supported by strong bridal sales, which typically yield higher lifetime customer value. The company opened a new flagship store in Vancouver, underscoring confidence in this fastest-growing market.
New Zealand revenue rose 3.1% to NZ$112.4 million with SSS growth accelerating to 5.6% in the second half. Gross margin remained stable at 58.0%, balancing a deliberate offer adaptation with increased bridal sales contribution.
The store network contracted slightly to 281 stores globally, with six net closures offset by four flagship store openings featuring refreshed brand designs and modernised customer experiences.
Balance sheet strength and board succession
Net debt plunged from AU$41.9 million to AU$5.5 million, reflecting disciplined cash flow and working capital management, including renegotiated supplier terms. The company refinanced its debt facility through ANZ and Commonwealth Bank, extending maturity to August 2028 with improved margins.
Board renewal is underway with Chair Rob Fyfe announcing retirement effective 28 November 2026. Claudia Batten, current Deputy Chair, will succeed him. The board also appointed two new Non-Executive Directors, Karen Bozic and Mark Bayliss, bringing retail, consumer, audit, and governance expertise to support long-term succession and capability.
Early FY27 trading and outlook considerations
Trading in the first eight weeks of FY27 shows continued momentum with group same store sales up 4.4% on a constant currency basis. Canada leads with 9.8% growth, followed by New Zealand at 3.3% and Australia at 1.7%. Gross margins have also strengthened year-on-year.
While the company navigates a challenging macroeconomic environment, the initial FY27 performance and strengthened balance sheet position Michael Hill to pursue ongoing profitable growth. However, the market will watch closely how the company manages inflationary pressures, competitive dynamics, and execution of its strategic simplification.
Bottom Line?
Michael Hill’s FY26 results signal a turning point, but sustaining growth amid cost pressures and competitive retail dynamics remains the key challenge.
Questions in the middle?
- Will Michael Hill’s focus on core brands sustain momentum in a volatile retail environment?
- How will the new board members influence governance and strategic direction?
- Can online sales growth accelerate further to narrow the gap with peers?