Credit Suisse considers Michael Hill International has provided a strong trading update, with four weeks of critical Christmas trade remaining. Year-to-date same store sales grew 7.9%, largely driven by Australia, notes the broker.
The analyst believes the over 200 basis point gross margin improvement reflects a balance of both margin and sales growth, after a period where management focused on defending market share.
Guidance is for first half earnings (EBIT) to materially exceed the previous corresponding period.
Outperform rating maintained. Target is increased to NZ$0.93 from NZ$0.69.
Sector: Consumer Durables & Apparel.
Current Price is $0.64. Target price not assessed.
