Jewellery retailer Michael Hill International says trading conditions in Australia, its largest market, are challenging and resulting in margin pressure, which will have an adverse impact on half-year profit.
Same store sales across the Tasman declined 0.5 per cent to $177.4 million in six months to December 31, the company said yesterday.
However, Michael Hill said same store sales growth had been "solid" in New Zealand, Canada and the United States.
In New Zealand, same store sales rose 9.9 per cent, while in Canada they rose 2.1 per cent and 16.4 per cent in the US. The company said total sales for the six months to December were $287.7 million, a 7.2 per cent increase on the prior comparable period.
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"Despite difficult trading in Australia during the period, the group's cashflow remained strong for the half-year," the firm said.
The company said half-year earnings before interest and tax were expected to be in the range of $33 million to $35 million, compared with $32.3 million in the corresponding period last year.
Full half year results will be released on February 16, the firm said.
Michael Hill shares closed steady at 87c last night.