JB Hi Fi Delivers The Goods As Dick Smith Struggles
Yesterday JB Hi Fi CEO Richard Murray told the Macquarie Australia conference that the mass consumer electronics and appliance retailer had grown sales in the first quarter 8.35%, the industry average for consumer electronics and appliance is down 3.7%.
Murray forecast a net profit of between $127 million and $131 million.
He told attendees “We have continued to see good sales momentum in the 2nd half. In Australia we have seen a pleasing trend of positive comparable sales since Christmas, including an increasing percentage of appliance sales in stores converted to our HOME concept”.
“The sales trend in NZ has improved and we see the rollout of HOME as an important next step for JB in the market. Comparable sales growth was +6.6% for the 3 months to March 2015”. He added.
According to industry sources Dick Smith who is currently running what has been described as “rampant discount programs” is cutting back on stock levels. Brands such as Toshiba are still waiting for new orders of notebooks while two major accessory manufacturers have been told to remove stock from stores with some accessory suppliers telling ChannelNews that their branded products are being replaced by house brand products that are being sold at the same price as branded products”.
According to JB Hi Fi management the group has had a lot of success selling premium branded products such as the $2,300 Lenovo Yoga Pro 3, Sonos and Bose wireless sound systems and top end Sennheiser headphones. Also helping the Company to achieve good profitability are brands such as Samsung and LG who are now delivering premium 4K Ultra High Definition TV’s, Samsung has also released the new Galaxy S6 smartphone range via JB Hi Fi stores and so has HTC with their new HTC One M9.
In the appliance market the Company is seeing growth come from premium appliance including top end refrigerators and washers as well as a new range of small appliances from manufacturers such as Delonghi.
Shares in JB Hi-Fi rose yesterday to $19.25 this was up 1.7% on the prior day.
According to analysts JB Hi Fi’s appliance business is now generating between $4.3 and $4.7 billion in sales with this expected to grow as the Company opens up more floor space for appliance ranges.
The Company will have 43 HOME stores by the end of June in Australia and New Zealand Murray said.
New Zealand continues to be a weak spot, with third-quarter sales up 5.8 per cent but same-stores sales were down 1.1 per cent.
Retail sales grew by just 0.3 per cent in March, according to Australian Bureau of Statistics figures released on Wednesday.