Michael Hill Reports Strong Profit Growth, Signals Dividend Return

Michael Hill International reported substantial growth in profitability and sales during the first half of the financial year 2026, ending December 29. The jeweller, which operates stores in New Zealand, Australia, and Canada, achieved a sales revenue of $370 million, marking a 3% increase compared to the same period last year. Its after-tax profit surged by 32% to $22.2 million, largely driven by strong performance in Canada.

Sales in Canada were particularly impressive, rising more than 6% in the period, while Australia saw a 4.8% increase. Local sales in New Zealand also contributed to the overall growth, albeit at a more modest 1.8% increase. Despite this strong financial performance, the board opted not to declare a dividend for the period, indicating plans to resume dividends at the full-year results.

With the recent appointment of new CEO Jonathan Waecker, the company is taking the opportunity to reassess its strategy. Waecker described the operating performance as “materially stronger,” attributing the improvement to increased sales volumes that generated an additional $6.3 million in gross profit. This growth is a result of new market initiatives and strategic pricing adjustments, which helped to mitigate ongoing pressures from elevated input costs, especially for precious metals like gold.

“Importantly, disciplined cost management ensured operating expenses were controlled in an inflationary environment,” the company stated in a trading update. This careful oversight has enhanced operating leverage and contributed to the overall improvement in earnings.

In the past six months, Michael Hill has implemented several working capital initiatives, including revised supplier terms with a key partner. The company has also focused on improving stock efficiency, successfully reducing inventory holdings by $11.3 million to $201.9 million.

Looking ahead, Waecker acknowledged that the company remains “mindful of current economic conditions.” However, he expressed optimism as the first-half results demonstrate that consistent execution of retail fundamentals is translating into improved performance. He stated, “At our Investor Day in April, we will provide clarity on how the business will build on its current trading momentum and deliver sustainable, profitable growth over time.”

Chairman Rob Fyfe emphasized the board’s commitment to restoring a consistent and sustainable dividend for shareholders. He noted that improvements in the group’s balance sheet and trading performance suggest a potential return to dividends during the full-year results, contingent on maintaining favorable trading conditions.