Michael Hill Posts 376% Profit Surge on Canadian Growth

Michael Hill (ASX:MHJ) delivered a significant financial turnaround in the year ended June 2026, with full-year earnings surging 376% to $10 million. The New Zealand-based jeweller returned a 2 cent per share dividend to shareholders after a two-year pause, supported by a 2% increase in total revenue to $655.7 million. CEO Jonathan Waecker attributed the recovery to a disciplined restructuring of the brand portfolio and a pivot toward products that align with current consumer spending habits.

The company’s performance was bolstered by its expanding Canadian operations, which now account for 35% of total revenue. In this market, same-store sales grew by 7%, outpacing the 4.8% growth recorded in Australia. This geographic shift has been a key driver of the company’s improved margins, allowing Michael Hill to offset softer demand in its home markets.

Canadian expansion drives revenue growth

Canada has emerged as the fastest-growing market for Michael Hill, with same-store sales up 7% in the latest fiscal year. The region now contributes 35% of the company’s total revenue, surpassing New Zealand’s 15% share and rivaling Australia’s roughly 50% contribution. Management has identified this market as a primary avenue for future expansion, citing strong brand recognition and consumer acceptance of the company’s value proposition.

The success in North America is partly attributed to the brand’s identity as a New Zealand player, which differentiates it from American competitors. This positioning has resonated with Canadian consumers seeking high-quality options that are not associated with mass-market American retail brands. The company plans to leverage this momentum to continue growing its footprint in the region.

Accessible luxury products boost sales

In response to constrained consumer wallets and sagging housing prices, Michael Hill has adjusted its product mix to emphasize affordable luxury. The company reported a resurgent interest in 18-carat necklaces plated on sterling silver, which offer a high-end aesthetic at an accessible price point. Additionally, custom-made items such as bespoke rings have seen increased demand, with the company currently offering this service in 40 stores with plans to expand to all 245 locations.

The value-oriented Brevilles brand also contributed to sales growth by launching water-resistant jewellery priced between $39 and $59. These products have sold well, appealing to budget-conscious consumers who still desire durable, stylish accessories. The company also noted that watches remain a steady performer, refuting the notion that the category has fallen out of favor among shoppers.

Brand consolidation simplifies operations

Michael Hill streamlined its operations by focusing on its core brands and discontinuing three others. The online ring builder 1077 was integrated into the main Michael Hill platform, reducing complexity in the company’s retail and digital infrastructure. CEO Jonathan Waecker stated that managing multiple brands was complicated, and the consolidation has allowed the company to allocate resources more efficiently toward its primary growth drivers.

The company’s $135 million market cap places it in a distinct segment of the ASX, competing with larger players like Lovisa Holdings (ASX:LOV) and newer entrants such as SkinKandy (ASX:SK1). While Lovisa focuses on fast-fashion, mass-produced items, Michael Hill maintains a focus on higher-quality, durable goods. This differentiation allows the company to occupy a specific niche in the fragmented Australian and international jewellery sectors.