Michael Hill says it faces competition in all markets, which pressure margins. Photo: RNZ / Calvin Samuel
Weak consumer demand is continuing to plague firms, with two listed companies expecting earnings to fall.
Jewellery retailer Michael Hill said New Zealand revenue fell 11 percent in the 45 weeks ended 12 May, although group sales (including Australia and Canada) rose 4.7 percent.
Michael Hill said margins were being squeezed as costs rose and gold prices hit record highs.
"Positive sales momentum had been expected through the second half in line with anticipated improvements in consumer sentiment and economic conditions," the company said.
"Unfortunately, this has not materialised, with second-half sales performance broadly in line with the first half, and margin still under pressure."
Michael Hill said it also faced competition in all markets, which pressured margins.
"There is no doubt that consumer discretionary spend, and the fine jewellery category in particular, remain under pressure due to macroeconomic forces," the retailer's chief executive Daniel Bracken said.
"Higher interest rates are leading to a sustained and prolonged decline in consumer spending," he said.
Meanwhile, honey exporter Comvita said it expected lower revenue and underlying earnings, largely due to weaker demand from China.
It said conditions were made worse by the partial cancellation of China's second-largest retail festival, 618.
Comvita expected full-year revenue to be $211million to $218m, compared to the previous estimate of $225m-$235m.
It said underlying earnings would likely be $23m-$28m, down from the previous guidance of $30m-$35m.
The company said a difficult 2024 meant its 2025 target of $50m in underlying earnings was unlikely to materialise.