Citi says Michael Hill's Q3 update shows stronger-than-expected margin expansion

Michael Hill International

13/04/2022 24:17

** Citi Research says Michael Hill International's  MHJ.AX 
better-than-expected Q3 trading update revealed
stronger-than-expected margin expansion across all regions 
    ** The Australian jewellery retailer on Tuesday said Q3
all-store sales were up 11.1%, while same-store sales rose 4.8%
from a year earlier  urn:newsml:reuters.com:*:nL3N2WA08D
    ** Citi says impact from Omicron disruption appears to have
reduced in the latter part of Q3
    ** Citi's H2 sales growth estimates of 8% implies Q4 sales
growth will slow to 5% 
    ** Citi forecasts conservative growth in Q4 due to ongoing
COVID disruptions in New Zealand and adverse impact from
Australian federal election
    ** "We were pleasantly surprised by MHJ's strong margin
improvement across all regions in Q3, despite facing headwinds
from increasing input costs" - Citi
    ** All two analysts covering the stock rate it "buy" or
higher; their median PT is A$1.71 – Refinitiv data
    ** MHJ stock down 12.3% this year, as of last close

 (Reporting by Harish Sridharan in Bengaluru)
 ((harish.sridharan@thomsonreuters.com;))