A handful of retailers including jeweller Michael Hill International (ASX: MHJ) and online cosmetics store Adore Beauty (ASX: ABY) have bucked a downward trend on the All Ordinaries index today after reporting positive sales results for FY24.
Shares in Michael Hill are up 5.6 per cent at the time of writing thanks to a 4.9 per cent lift in sales to $278.6 million for the June half, and earnings being in line with analyst expectations at $14-16 million for the full financial year. The group revealed its results after the market closed yesterday.
Meanwhile, shares in Adore Beauty are up 4.6 per cent following a 7.4 per cent increase in sales to $195.7 million for FY24, underpinned by record returning customer numbers of more than half a million.
Universal Store (ASX: UNI) are up 3.11 per cent after group sales rose by 9.7 per cent to $288.5 million for the year, while sales momentum has improved further in July with total sales up 15 per cent in the first fortnight of FY25.
All reflections from the leaders of these companies highlighted the success of their strategies and business models despite an environment that has been challenging overall.
Michael Hill International
"While challenging economic conditions have persisted across all markets throughout the year, particularly in the fine jewellery segment, the group has continued to outperform the category, with a focus on retail fundamentals and execution of its clearly articulated strategies," said Michael Hill International CEO Daniel Bracken.
"Particularly pleasing was the consistent performance of our Canadian business throughout the year.
"While FY24 was disappointing, and trading conditions are expected to remain challenging, initiatives are underway to drive sales and productivity, enhance margin, optimise inventory, prioritise and reduce capital expenditure to protect the balance sheet, and further embed cost conscious discipline across the business."
The sales growth rate for Michael Hill was much higher for its largest market, Australia, at 12 per cent, while sales in New Zealand declined by the same percentage. The group has also increased its existing debt facility by $40 million to support seasonal working capital requirements for the Christmas trade.
The company's digital sales have also returned to double digit growth on prior year.
"As a key milestone of the Michael Hill brand elevation journey, April saw the unveiling of our first global flagship store at Chadstone in Melbourne showcasing the new brand codes, our first brand ambassador, Miranda Kerr, and a complete re-platforming of our website," Bracken said.
"I am extremely proud of the enthusiasm, passion and dedication demonstrated by all our team involved in the meticulous and considered delivery of such a pivotal moment for the Michael Hill Brand."
The group adds that the store count for Bevilles, which it acquired last year for $45 million, has risen from 26 to 36 stores, with Michael Hill International finishing the financial year with 300 stores.
Adore Beauty
Adore Beauty, which is on track to acquiring Australian beauty and wellness brand iKOU by the end of this month with its products to available for sale on the platform in August, has reported a "strong result in a challenging retail environment".
The group claims its focus on "customer centricity" has led its returning customer base to grow 5.8 per cent to a record 519,000.
"Adore Beauty continues to deliver revenue and active customer growth, even as cost-of-living pressures impact consumer sentiment and trading conditions more broadly," said outgoing CEO Tamalin Morton.
"Our solid performance over FY24 has reaffirmed the resilience of both our business and the beauty and personal care category, and we continue to focus on meeting customer needs, while growing both sales and profitability."
The company added that the recruitment process for replacing Morton, who announced her resignation in April for personal reasons, was progressing well and being led by an executive search firm in conjunction with the board.
Morton will remain as CEO until September 2024 and will take up a consulting role providing strategic advice to Adore Beauty after that time.
Universal Store
Clothing retailer Universal Store attributed its strength of sales to enhanced execution rather than any favourable macro-economic factors, which continue to pose challenges.
The company ended the financial year with net cash of $14.3 million excluding lease liabilities and a "well balanced and clean" inventory.
Universal is forecasting earnings of $46-47 million for FY24, compared to $40.4 million in FY23.
"We’re really pleased to have delivered significant growth in underlying EBIT versus last year, amidst a backdrop of a ‘cost of living crisis’, inflationary pressures and evolving market dynamics," said group CEO Alice Barbery.
"Our team have showcased our resilience and strategic acumen in navigating fluctuating market conditions.
"These results underscore our commitment to customer led outcomes and operational excellence. We’ve maintained a steadfast focus on managing margins, optimising inventory and controlling costs."
Other standouts
Other retailers that have seen spikes in their share prices this week include Step One Clothing (ASX: STP) and Accent Group (ASX: AX1).
On Wednesday, Step One revealed its expectations for a 29 per cent rise in revenue to $84 million for FY24, and an even greater jump in earnings of 42 per cent to $17 million.
"I am pleased to report another period of profitable growth for Step One. Our high-quality sustainable innerwear products, in-house marketing capabilities and brand ownership continue to resonate well with customers," said Step One founder and CEO Greg Taylor.
"With a strong financial position, we are well positioned to continue expanding our customer base, establish new retail partnerships and grow our brand presence globally.
"I remain very confident that Step One is in a strong position to continue its profitable growth."
Step One shares are down slightly today but have risen 20.77 per cent this week, while Accent Group shares are up 8.5 per cent for the week due to positive investor sentiment around its decision to exit half its Glue Store locations.
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