MICHAEL HILL INTERNATIONAL LIMITED (MHJ)
Share Price Analysis and Chart

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03/09/2024

3

Neutral

$0.57

16.33%

Michael Hill's FY24 results on August 30 highlighted to Citi the re-positioning of the business with a multi-brand strategy. Management is targeting higher margin products, and a new brand is in a trial phase.

Management's FY25 trading update looked promising for Australia and Canada, in the broker's view, but weakness in New Zealand
continues.

While the target falls to 57c from 66c on lower earnings (EBIT) forecasts across FY25 and FY26, the broker believes the business will be more resilient as the core brand resonates with customers. A path of store profitable store-rollout (Bevilles expansion) is also noted.

The Neutral rating is unchanged.

FORECAST
Citi forecasts a full year FY25 dividend of 2.50 cents and EPS of 2.60 cents.
Citi forecasts a full year FY26 dividend of 3.10 cents and EPS of 4.20 cents.

09/09/2024

2

Overweight

-

-

Jarden notes Michael Hill's group sales for the first eight weeks of FY25 turned positive, suggesting a turnaround from a very challenging FY24.

A&NZ were the weaker locations with Canada generating flat sales year-on-year for FY24 with some indication of market share gains.

In the first eight weeks same store sales grew 5% in Australia and 4% in Canada with NZ down -6.2%.

Gross margins came under pressure from discounting in May/June although sales picked up.

Management highlighted net new stores of -4 with FY25 capex expected to be lower as new store formats and products are "bedded down" for Bevilles.

Target price moves to NZ78c from NZ72c. Overweight rating unchanged.

FORECAST
Jarden forecasts a full year FY25 dividend of 2.50 cents and EPS of 3.70 cents.
Jarden forecasts a full year FY26 dividend of 5.50 cents and EPS of 7.50 cents.