6 months trading update to 31 December 2016

7 Smallwood Place, Murarrie, QLD 4172 Australia • GPO Box 2922 Brisbane, QLD 4001 Australia
t: +61 7 3114 3500 f: +61 7 3911 1312 www.michaelhill.com.au investor.michaelhill.com
M A R K E T R E L E A S E
T R A D I N G U P D AT E TO 31 D E C E M B E R 2016



• The Group achieved a total store sales increase of 5.7% for the 6 months to 31 December 2016 and same
store sales growth of 1.0%
• The Michael Hill brand delivered total store sales growth of 4.6% and same store sales growth of 1.0% for
the 6 months
• The Emma & Roe brand achieved total store sales growth of 71.9% and same store sales growth of 1.1%
for the 6 months
• Eight Michael Hill stores and eight Emma & Roe stores were opened during the period giving a total of 329
stores trading at the end of the half, made up of 305 Michael Hill stores and 24 Emma & Roe stores
• Ten Michael Hill and six Emma & Roe stores are scheduled to be opened in the second half. This will result
in 32 new stores opening for the year which is well above the 19 stores opened last year. The growth in
store numbers is coming primarily from Canada where we are trying to secure the remaining available sites
and also from the ramping up of Emma & Roe growth

SUMMARY
SUMMARYSUMMARY
SUMMARY


The Group continues to grow same store sales, expand its store footprint for both the Michael Hill and Emma & Roe
brands, and maintain solid gross margins.
Trading for the half ended on a solid note with December’s same store sales up 2.5% for the month. This was
achieved against a back drop of choppy macro conditions in our various geographic markets and higher than usual
competitor discounting in Australia and Canada.
The Michael Hill brand saw our Canadian segment continue to impress with strong same store sales growth, and
when combined with five new store openings will place this business in a sound position to lift EBIT margin growth.
NZ had a tougher half this year after a strong performance last year but the business remains in good shape with an
experienced and high performing management team in place. Australia likewise had a bumpy half but is positioned
to perform solidly in the second half. The US business will require some extra focus in the second half to correct its
results from the first half, and this effort will be led by our North American President, Brett Halliday who has been
doing a great job of running our Canadian segment for many years now.

Our Emma & Roe brand continues to grow in Australia and reached 24 stores at the end of the half. While same
store sales were relatively flat for the half we have secured and opened some excellent new store locations in both
Queensland and NSW and this will allow us to increase our marketing spend in the coming 12 months as critical
mass is achieved in each advertising region.

GROUP SALES
Revenue from the sale of goods and services for the 6 months to 31 December 2016:





The following figures are in Australian dollars Last Year This Year % Var
Michael Hill same stores 299,687,116 302,698,162 1.0%
Emma & Roe same stores 4,288,549 4,334,556 1.1%
Total same stores $303,975,665 $307,032,718 1.0%

Michael Hill all stores 305,406,527 319,395,515 4.6%
Emma & Roe all stores 5,086,400 8,745,235 71.9%
Total all stores $310,492,927 $328,140,750 5.7%



Exchange rates used for the 6 months:
New Zealand 1.09 1.05
Canada 0.96 0.99
United States 0.72 0.75

7 Smallwood Place, Murarrie, QLD 4172 Australia • GPO Box 2922 Brisbane, QLD 4001 Australia
t: +61 7 3114 3500 f: +61 7 3911 1312 www.michaelhill.com.au investor.michaelhill.com
MICHAEL HILL BRAND
• Our Canadian segment traded strongly for the half and reported same store sales growth of 7.4% in local
currency and total store sales growth of 17.8%. It appears we are continuing to take market share in this
market as the competition continue to struggle. Five stores were opened during the period giving a total of
72 at the end of the half and another eight stores are planned to open in the second half.

• The New Zealand segment finished down1.5% for the half, however importantly the month of December
produced sales growth over last December which was pleasing. One new store opened in Christchurch
giving 53 stores trading at the half year.

• The Australian segment achieved same store sales growth of 0.3% for the half which was below our
expectations however December produced a solid result with same store sales growth of 1.3%. Many
competitors went on sale earlier than normal in December to try and bolster pre-Christmas sales however
we resisted that trend and focused on maintaining good quality sales and gross margin in this critical
period. Two new stores opened in Australia giving a total of 170 open at 31 December.

• Our US business had a poor December quarter and we finished the half 8.8% down for the same stores.
We continued to experiment with our marketing and merchandise strategies during the half and are
confident that along with the recent changes to the leadership team, this will enable us to improve our
results in the second half. With continued consolidation of jewellery industry in the US the company still
sees a good opportunity for our company in this large and lucrative market.

In Australian dollars, the Michael Hill brand reported same store sales growth of 1.0% for the half year. Eight new
Michael Hill stores opened during the half, with 305 Michael Hill stores trading at the end of the half year. There
are plans to open ten more stores in the second half of FY17 mostly in the Canadian market.



Michael Hill same store figures in local currency Last Year This Year % Var
Australia same stores AUD 175,815,152 176,401,267 0.3%
New Zealand same stores NZD 67,890,133 66,904,510 (1.5%)
Canada same stores CAD 49,759,408 53,448,907 7.4%
United States same stores USD 7,127,356 6,499,020 (8.8%)



Michael Hill all stores figures in local currency
Australia all stores AUD 176,828,837 182,222,998 3.1%
New Zealand all stores NZD 67,893,044 67,043,018 (1.3%)
Canada all stores CAD 53,824,078 63,405,647 17.8%
United States all stores USD 7,480,601 7,035,776 (5.9%)


EMMA & ROE BRAND
Emma & Roe achieved store sales growth of 71.9% and same store sales growth of 1.1% for the half year and
eight new stores were opened during the period as we rolled out our New South Wales expansion plan. Given the
opening of eight further stores during the half and the inevitable dilution this causes when we moved experienced
managers into new store locations we were satisfied with the half. The existing store base will gain sales momentum
as our retail management team develop and gain experience. The newly appointed General Manager of Emma &
Roe is settling into her new role well and the business is positioned for further store growth in an effort to achieve a
critical mass of stores that will allow us to market and advertise more effectively. We are establishing a good
foothold in the large and lucrative New South Wales market and further growth is planned in this market for the
coming 6 months. There were 24 stores open at the end of the half year with plans to open a further six in the
second half of FY17.

Emma & Roe same store figures in local currency Last Year This Year % Var
Australia same stores AUD 3,923,244 3,958,011 0.9%
New Zealand same stores NZD 399,016 394,680 (1.1%)



Emma & Roe all stores figures in local currency
Australia all stores AUD 4,724,963 8,368,690 77.1%
New Zealand all stores NZD 394,660 394,680 0.0%

7 Smallwood Place, Murarrie, QLD 4172 Australia • GPO Box 2922 Brisbane, QLD 4001 Australia
t: +61 7 3114 3500 f: +61 7 3911 1312 www.michaelhill.com.au investor.michaelhill.com
The above figures for Michael Hill and Emma & Roe represent five months accounting adjusted sales results plus
December preliminary sales figures prior to final accounting adjustments, and are unaudited. Revenue figures stated
above include the Professional Care Plan (PCP) revenue brought to income during the period and sales through our
store and online channels. The PCP income recognition pattern is based on existing estimates and is subject to
ongoing management review and adjusted at half year/year end as required.





Media & Investors:
Phil Taylor
Chief Financial Officer and Acting Chief Executive Officer
+61 7 3114 3507
phil.taylor@michaelhill.com.au


ABOUT MICHAEL HILL INTERNATIONAL
Michael Hill International was founded by Sir Michael Hill in 1979 when he opened his first jewellery store in
Whangarei, New Zealand. The Group currently has 305 Michael Hill branded stores in Australia, New Zealand,
Canada and the US and 24 Emma & Roe branded stores in Australia and New Zealand. The Group’s global
headquarters including its wholesale and manufacturing divisions is located in Brisbane, Australia. The Company is
listed on the ASX (ASX:MHJ) and the NZX (NZX:MHJ).

For more information:
www.investor.michaelhill.com
http://www.michaelhill.com.au/
www.emmaandroe.com.au