BREAKING NEWS: JB HI Fi Sales Climb 23% Record Profits
JB Hi Fi has reported a 16% jump in profits to $152.5M the result comes off the back of a 23% jump in sales.
The result is the first following the aquisition of The Good Guys.
JB Hi-Fi said that they are looking to increase their share of the $20 billion consumer electronics and appliances markets after posting its strongest ever sales and earnings growth.
The Company delivered sales of $2.6 Billion with several brands reporting that the Company ran out of stock of several popular products during the Xmas New Year period.
Chief executive Richard Murray said JB Hi-Fi would not rest on its laurels or succumb to temptation to raise prices after the demise of Dick Smith, and had plenty of growth ahead even without buying appliances chain The Good Guys.
“There’s good opportunities with Dick Smith, we are doing a lot better with our online business, we are growing our Solutions (commercial) business, we are taking market share across a majority of our categories and we are evolving stores to capture those opportunities – there’s a lot of growth within the existing business,” Mr Murray said after reporting a better than expected 11.5 per cent increase in net profit to $152.2 million.
Total sales grew by 11.7% to $2.2 billion, with comparable sales up 8.7%.
Key growth categories were the Communications, Audio, Cameras, Accessories, Computers and Home Appliance categories.
In HY17 online sales grew 40.4% on the pcp to $84.8 million or 3.8% of total sales, reflecting continuous improvement across many aspects of the Company’s digital assets.
JB HI-FI Solutions continued to grow and remains on track to deliver on its longer term sales target of approximately $500m per annum, through both organic growth and strategic acquisitions.
Gross profit increased by 13.2% to $496.5 million with gross margin up 30 bps at 22.2%, primarily driven by a
change in sales mix.
Murray said that total operating costs were in line with management’s expectations and store wages remained well controlled.
The Australian Financial Review said that Murray had brushed aside concerns that JB Hi-Fi would be one of the retailers worst affected by Amazon’s inevitable expansion into Australia, saying its prices were keen and its cost of doing business was lower than that of the e-commerce “gorilla”.
Citigroup believes Amazon could capture up to 7 per cent of the electronics market, based on its success in similar markets overseas, and JB Hi-Fi had the most to lose given its product overlap and relatively high margins.
“I wouldn’t share that view, but we know Amazon has been looking at us for a number of years – that’s why we continue to invest in price,” Mr Murray said.
“The best way to ensure you remain efficient is to make sure we reinvest in price whatever the competitive threat. We’ve seen lots of competitive threats over the years that have come and gone – Clive Peeters, Mega Mart, Dick Smith – many have struggled because it’s such a competitive space.”
More to follow