JB Hi Fi Sales Up As Group Moves To Expand Appliance Offerings
JB Hi Fi management said that overall gained momentum through FY15 with positive comparable sales of 7.4% in the second half of FY15.
Total sales grew by 5.0% to $3.46b, with comparable sales up 3.1%.
Hardware and services1 sales in FY15 were up 8.1%, with comparable sales up 6.2% driven by the Telco,
Fitness, Accessories, Computers, IT and Home Appliance categories; offset by softness in the TV market.
Software sales in FY15 were negative 8.2% and on a comparable basis were negative 9.7%.
Total sales were down 0.1% to NZ$211.1m, with comparable sales down 4.5%.
Profit at the mass retailer increased by 5.6% to $798.3m.
Consolidated gross margin was 21.9%, a 16 bps increase.
In Australia, gross margin increased by 15 bps on the pcp to 22.1%, driven by a combination of sales mix and improved buying terms.
In New Zealand, gross margin increased 13 bps to 18.2%.
Four new JB HI-FI HOME stores and one new JB HI-FI store was opened during the period, while 17 JB HI-FI stores were converted to JB HI-FI HOME.
CEO Richard Murray said that a total of six new stores are expected to open in FY16, five JB HI-FI HOME stores in Australia and one JB HI-FI store in New Zealand.
He also said that 16 existing JB HI-FI stores are expected to be converted to JB HI-FI HOME models.
Murray said that the JB Hi Fi HOME stores which Dick Smith is moving to copy with their Connected Home stores requires approximetly 400 sqm of additional space (total store size 1,750 sqm).
He claimed that the move into selling appliances was paying off and that the group was targeting $3m in incremental sales increases in this category rising to $5m over the “medium term”.
He said that their current target of 75 HOME stores should be reached during FY17.
Murray said “In addition to the HOME roll-out, we are also introducing small appliances into existing JB HI-FI stores”.
These stores will have their existing layout reconfigured and will not be rebranded to JB HI-FI HOME. This store format is suited to stores that are located within shopping centres or where a HOME store is or will be located within that store’s catchment area”.
The Australian Stock Report has issued a “buy” recommendation on JB Hi-Fi.
According to Chris Conway, head of research at Australian Stock Report, there are at least two main drivers for the electronics/electrical retailer’s out performance. “We can see continuing strong electrical sales driven primarily by hardware upgrades.
Then there is the tailwind from the recent federal budget’s tax incentive for capital equipment purchases for small businesses,” Conway said.
“If we see any clarity on new product leading into Christmas, in particular the company’s plans on selling ‘drones’, it could keep the market excited. This is a major potential item for sale, and like others in the history of the company (computers, tablets, game consoles, digital cameras, audio-visual), should not be under-estimated,” Conway said.