Michael Hill stock drops after sales dip

Michael Hill shares have slumped again after the jewellery retailer said its Australian sales were still slipping.

The company’s Australian same-store sales were down 3.4 per cent in the three months to March 31, and are now 7.4 per cent lower for the first nine months of the financial year.

Shares in the company slipped 5.0 cents, or 7.46 per cent, to 62 cents at 1105 AEST, continuing a slide more than 60 per cent since the all-time high of $1.69 shortly after the company’s July 2016 ASX listing.

But the jeweller said on Wednesday the same-store decline across its total operations – including Canada and New Zealand – was just 1.5 per cent for the quarter, an improvement on falls of 11 per cent and 2.9 per cent in the previous two quarters.

“The company’s performance continued to stabilise during the quarter, as refinements to the strategy improved our position from the first half, further regaining ground lost in the first quarter,” chief executive Daniel Bracken said.

In February, the company admitted its “dramatic” shift away from discounting had not been helpful, with total first-half revenue slipping 2.7 per cent to $315.4 million.

Australian stores suffered the most pain, with the changes contributing to a 5.1 per cent first-half sales slide.

On Wednesday, Mr Bracken, who came to Michael Hill via a stint as chief executive of Specialty Fashion, said the company remained committed to its $5 million annualised cost reduction program outlined in January.

Meanwhile, plans to harness growth in Canada delivered a 0.1 per cent lift in same-store sales during the March quarter.

New Zealand sales in the three months to March dipped 6.3 per cent.

By AAP

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