Key Highlights

  • Michael Hill returned to positive same-store sales growth in H1 FY2026 (26 weeks to 28 December 2025): group revenue up ~3% to ~A$371 million, same-store sales up ~3.8%, comparable EBIT up 28.6% to ~A$31 million.
  • New CEO Jonathan Waecker, appointed in 2025, simplified the brand portfolio to two — Michael Hill and Bevilles — retiring Medley, TenSevenSeven and other smaller ventures in April 2026.
  • Michael Hill is not currently paying ordinary dividends; no interim was declared at H1 FY2026, with the board indicating it will consider returns at the full-year result.
  • The balance sheet moved to net cash of ~A$20.7 million in H1 FY2026, up from net debt of ~A$9.8 million a year earlier; inventory fell ~A$11.3 million to ~A$201.9 million.
  • Record gold prices through 2025 are a double-edged sword: supporting perceived jewellery value while pressuring input costs; gross margin was broadly held at ~61.2%.

Michael Hill International (ASX: MHJ) has shown early signs of a turnaround, returning to group sales growth and lifting comparable earnings in the first half of FY2026. The group has simplified its portfolio to two brands and cut costs under new CEO Jonathan Waecker. However, the company is not currently paying ordinary dividends, so shareholders are reliant on capital growth, and record gold prices and cautious consumers remain headwinds. Whether the recovery proves lasting depends on sustained same-store sales, protected margins and disciplined execution.

Recent Performance

H1 FY2026 (26 weeks to 28 December 2025) was the clearest sign of improvement. Group revenue rose ~3% to approximately A$371 million, and same-store sales increased ~3.8% group-wide. The improvement was broad-based: Australia up ~6.5%, Canada up ~13% and New Zealand up ~7.1% in early-half trading updates — all three markets contributing rather than a single geography carrying the group. Comparable EBIT rose 28.6% to ~A$31 million, while reported EBIT came in near A$38.9 million. Gross margin was broadly held at ~61.2%, only marginally below the prior year's ~61.3% — important given gold price pressure on input costs. The shares reached a 12-month high after the result was released in early March 2026.

For context, FY2025 (52 weeks to ~end June 2025) had been tougher: group revenue around A$644.9 million, broadly flat, with the statutory result near breakeven and EPS missing expectations. The H1 FY2026 improvement is measured against a low base — one strong Christmas half does not by itself prove the turnaround is entrenched.

Strategy: Two Brands, Less Complexity

The defining shift of 2026 has been simplification. In April 2026 Michael Hill announced it would concentrate on two core brands — the flagship Michael Hill banner and Bevilles — retiring smaller ventures including Medley and TenSevenSeven. Management framed it as cutting roughly 60% of the group's brands to "move fast." The logic: concentrate capital, management attention and marketing where returns are clearest, reduce supply-chain and systems complexity, and eliminate costs from experimental formats.

Bevilles was acquired in 2023 for ~A$45 million (business and selected assets). It remains one of the two retained brands, signalling management sees it as durable and scalable. The Michael Hill flagship spans Australia, New Zealand and Canada (~285 stores at H1 FY2026, down from ~294 a year earlier). Higher-margin add-ons — including the Professional Care Plan for jewellery cleaning and maintenance — and a growing loyalty program are key levers for lifting transaction value and reducing reliance on discounting.

Dividends: Not Currently Paying

Income investors should read this section carefully. Michael Hill has not been paying ordinary dividends in the recent period. No final dividend was declared for FY2024, and no interim dividend was declared at H1 FY2026 — with the board indicating an intention to consider shareholder returns at the full-year result. The stock has been screening with an effectively 0% trailing yield. As things stand, MHJ is not a dividend stock: any return for shareholders depends on capital growth. A resumption of dividends would likely require the board to be confident the recovery is sustainable and the balance sheet remains comfortably net cash. Treat any future dividend as a possibility to be confirmed, not an assumption.

What Investors May Watch Next

The full-year FY2026 result will be the first comprehensive test of whether H1's momentum has carried through a full year — and whether the board reinstates a dividend. Same-store sales trends across all three markets through the second half (January–June 2026) are the most important operational signal, particularly whether Canada's double-digit growth persists. Gross margin resilience against continued gold price pressure is the key profitability watchpoint. Progress on the brand-simplification cost-out — any write-downs or restructuring charges from exiting Medley and TenSevenSeven — will also feature in the full-year numbers.

Risks

Fine jewellery is highly discretionary: if household budgets tighten across Australia, New Zealand or Canada, sales momentum could stall quickly. Gold reached repeated record highs through 2025, raising input costs and potentially deterring price-sensitive shoppers — holding the ~61% gross margin while gold climbs is a key ongoing test. A new CEO, simplified brand portfolio and concept exits all involve transition risk, including potential write-downs and restructuring charges. Currency translation across three markets adds volatility to reported results. Much of the recent good news is relative to a weak prior year: a low base magnifies percentage improvements.

This article is general information only and does not constitute personal financial advice. Investors should conduct their own research and consider their objectives, financial situation and needs.