The Michael Hill International Ltd (ASX: MHJ) share price is gaining today after the company released a trading update for the fourth quarter of the 2021 financial year.
Right now, shares in Michael Hill are going for 87 cents apiece – 6.75% higher than their previous closing price.
Within its update, the jewellery retailer reported strong same-store sales growth and record digital sales.
Let's take a closer look at the news driving the Michael Hill share price higher.
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Michael Hill's trading update
The Michael Hill share price is soaring on the back of news its same-store sales were up over the quarter just been, despite many of its doors being temporarily closed due to lockdowns.
Over the quarter, Michael Hill's same-store sales were 7.5% higher than the previous comparable period, bringing in $54.6 million.
The jewellery retailer's full financial year same-store sales now total $474 million – 8.5% higher than in the previous financial year.
Additionally, its all-store sales were up 116.3% over the quarter, and 13.5% higher than the previous financial year's.
Michael Hill also reported record online sales over the financial year just been. Its online store processed more than $30 million worth of sales over the 12 months ended 30 June 2021.
That's particularly fortunate as 102 of Michael Hill's 150 Australian stores faced temporary closures due to COVID-19 lockdowns over the fourth quarter. In total, the company lost 559 trading days.
Its Canadian stores had a harder time yet. Of the 86 Michael Hill stores in Canada, 40 were closed for most of the fourth quarter and the rest faced restrictions. Michael Hill lost 3,323 trading days in the country.
Michael Hill also reported it maintained its strong margin over the quarter just been, and its earnings before interest and tax (EBIT) is in line with or above analysts' expectations.
The company expects to end the year with a cash position of around $70 million.
Commentary from management
Michael Hill's CEO and managing director Daniel Bracken said:
(Michael Hill has reported) sales growth in all markets, increased margins, and an outstanding performance from our bricks and mortar stores delivering almost 20% same-store sales growth for the quarter. Setting aside the global store network closure in 2020, Michael Hill has now delivered eight consecutive quarters of positive comp sales growth, together with sustained margin expansion.
This performance provides further evidence that our strategic transformation agenda is on track and delivering.
Michael Hill share price snapshot
Including today's gains, the Michael Hill share price has increased by 25% year to date. It has also gained 165% since this time last year.
The company has a market capitalisation of around $316 million, with approximately 387 million shares outstanding.
