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A boost in e-commerce sales has contributed to some polished results for jewellery retailer Michael Hill (ASX: MHJ) in 1H20.
Defying general Australian retail trends, the omnichannel player posted a 19.6 per cent increase to its NPAT, reaching $21.4 million during the half.
The group succeeded online as e-commerce sales grew by a generous 44.3 per cent to $9.7 million, now representing 3 per cent of total group sales.
Michael Hill CEO Daniel Bracken (pictured) says the increase in same store sales of 6.3 per cent and EBIT growth of 6.9 per cent is particularly pleasing considering the challenging trading conditions during the half.
"The result reflects the momentum we have built and is an early validation of both the strategy and the new management team," says Bracken.
"We remain convinced that the best way to insulate the business from external factors is a vigilant focus on retail fundamentals, alignment of retail execution, product newness and an unwavering focus on CODB."
During the period Michael Hill opened one new store in Canada, but shut down three underperforming outlets in Australia, giving the company a total of 304 stores at the end of 2019.
The group's e-commerce arm was helped along by the soft launch of a new loyalty program called Brilliance. Michael Hill intends to launch Brilliance in-store in the second half.
Looking forward Bracken acknowledges there are a number of factors going against the jewellery retailer, but the company says it is in a strong position to face them down.
"Recent local and global environmental factors have placed additional pressure on an already challenged consumer market," says Bracken.
"It's not yet clear what the cumulative impact could be on consumer confidence and discretionary spend. However, we believe we have put in place the right strategies and initiatives and it is more important than ever for us to focus on costs reduction, improving productivity across all retail segments, exploring omni-channel growth and continually strengthening our brand proposition."
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Business News Australia
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