Tough operating conditions of the Canadian operations of Michael Hill International declined its total same store sales by 0.4 per cent to $77.2 million during the first quarter of current financial year.

Australian same store sales, on the other hand, surged 0.2 per cent to $54.5 by September end based on NZ dollar.

Same store sales in Canada declined 8.7 per cent to $5.4m under the impact of drop in Canadian currency to $C4.1m. Total sales including figures for recently acquired Whitehall Jeweler stores in the United States surged 6.3 per cent to $84.6m during the reporting period.

Chairman Michael Hill said that trade remained satisfactory for the quarter in Australia despite slight decline in margins in August and September. Promotional activities and emphasize on consumer credit plans slightly impacted margins in New Zealand.

Mr. Hill added that Canadian consumer confidence significantly impacts economic conditions in the United States which remained challenging due to struggling conditions in Canada. He added, "We are not expecting this will materially improve in the next quarter. Reaching levels of revenue sufficient to be profitable is still some way off and not expected in the short-term."

Michael Hill's pre-tax profits declined 46.3 per cent in August while net profit before tax fell to $20.1 million in 2009.