Transcription of The Stock Network Interview with Michael Hill International (ASX/NZX:MHJ), CEO Jonathan Waecker
Lel Smits: Michael Hill International has just reported record FY26 results, marking a significant step forward in its turnaround strategy and returning the business to growth across Australia, New Zealand and Canada. Under new leadership, the company has simplified the business, sharpened its focus on its two core brands, strengthened its retail execution and renewed its focus on customers. The result has been stronger sales momentum, improved profitability and the restoration of dividends, while Bevels has also returned to growth.
I’m joined today by Michael Hill CEO Jonathan Waker to discuss the turnaround, the company’s growth strategy and outlook. Jonathan, welcome to The Stock Network.
Jonathan Waecker: Thank you so much. Really happy to be here with you.
Lel Smits: Pleasure to have you on. And look, Michael Hill has returned to growth across all three markets with stronger customer engagement and improved retail execution, helping to drive the FY26 result.
Can you outline for us what changed within the business over the past year and also what you see as those key factors behind the turnaround? Absolutely. Look, first and foremost, could not be prouder of what the team’s achieved and what they’ve pulled off over the last 12 months. I’ve been in the role now for just bang on a year.
So just really, really proud of the result. What has really changed is we got back to basics. We have a new leadership team in place, really spent some time out with our people.
I personally had the chance to get out to just over 40 percent of our stores, so over 150, listening to the frontline team, listening to customers and really solving problems at the frontline of retail. And really getting back to that founding belief that Sir Michael kind of embedded into this business at the beginning, that everyone deserves to have quality jewelry and to feel special wearing it. Getting back to that was critical.
We simplified the business. We’re down to two brands now, the Michael Hill brand, which is our global brand and our Bevels brand, which exists only in Australia. We listen closely.
We’ve sharpened our product. We’ve made our pricing and our promotions much, much more effective. And the results show it’s working.
We’re up in every single market. Our EBIT has improved greatly. We’ve seen growth in online and we have a much stronger balance sheet with a dividend that’s been restored.
So in short, back to basics, listen to the team. We’re getting on with it.
Lel Smits: Excellent. And Jonathan, look, as you’ve simplified the strategy, return to the core strengths of the Michael Hill brand with that greater focus on customer experience, product and retail execution. In terms of how you’re thinking differently though about the customer and the opportunity, can you outline what you’re doing to strengthen the brand from here?
Jonathan Waecker: Absolutely. So for the Michael Hill business, we’re really focused on what I would call everyday modern luxury.
And that’s really about beautiful, high quality jewelry that people can feel confident to wear, confident to give, and confident to celebrate with. That’s a really, really important tenet of the brand. And it all starts with the quality of the jewelry at the very beginning.
That means holding ourselves up to a really high bar when it comes to that particular quality and all the component parts that come with it, from the craftsmanship to the experience, to how we make our customers feel each and every they shop with us. At the same time, it means personalization. So we’re also seeing a huge upswing in people having products made custom for them.
In fact, this last year, we’re announcing that over 15% of our sales came from products that were custom made for customers. And the opportunity for here, in my opinion, is deepening that relevance, actually creating more products that connect with more parts of the customer experience, really getting them into the that make them and give them that incredible amount of joy and connecting them to the incredible quality cues and craftsmanship that we put into each and every product. And finally, Jonathan, with momentum building across Australia, New Zealand, and Canada, alongside continued growth in online and the recovery of their bills, where do you see the biggest opportunities to take Michael Heal forward? It’s a great question.
When I think about the growth levers, we outlined a couple of those a couple of months ago, and we’ve made incredible progress against every single one of them just in the last three months. Canada, in particular, remains our largest growth opportunity right now. We just had another record year with same store sales up over 7%.
Online sales in Canada actually up over 20%. So Canada, Canada, Canada is a massive opportunity for us. And what’s pleasing about that is that we already have the footprint.
We think we need maybe another four to five stores to really round out the network there, but we’re really close. On top of digital across every single market, that’s a huge unlock for us. We’re currently at about 8.8% of sales being digital.
And we think the upside there is at least two, if not three X in terms of penetration. And Bevels has genuinely turned a corner, which I could not be more pleased and proud of the team for. After a tough first half, the reset that we put in place over Christmas has taken hold.
And we’ve swung from the same store sales decline in H1 to same store sales growth of nearly 6% in H2. And more importantly, we’ve seen margin growth between the halves, so from H1 to H2, of over 600 basis points. So a swing to same store sales growth and a margin improvement that is very significant.
So Bevels has truly turned a corner, which is really powering a lot of our underlying growth going into the next year. So put together, we’ve got strong brands now, we’ve got three growing markets, we have a fast growing digital channel, and a lot of the reset work has now been put behind us. And now we can get on with actually activating on that foundation.
Lel Smits: Jonathan, thank you for the update from Michael Heal and congratulations on your results.
Jonathan Waecker: Thank you very much. Great to be here.
Ends