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JB Hi-Fi Record Sales Defy Oz Retail Slump

JB Hi-Fi has defied Australia’s retail slump by reporting “record sales and earnings” – notching a 6.1% EBIT jump, plus 7.1% lift in full-year net profit from $7.1 billion in sales.

Shares rocketed 8.30% to $30.28 shortly after market open.

“We are pleased to have delivered record sales and earnings, with JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys all delivering sales and earnings growth,” affirms Group Chief Executive, Richard Murray.

The Board has declared a final dividend of 51 cps fully franked, bringing the total dividend for FY19 to 142 cps – up 10 cps versus 132 cps in FY18.

For the twelve months to June 30, net profit hit $249.8 million versus $233.2 million the year prior.

Total sales growth for FY19 notched 3.5%, with earnings per share up 7.1% to 217.4 cps.

For JB Hi-Fi Australia comparable sales leapt 2.8%, with key growth drivers including Communications, Audio, Fitness, Games Hardware and Connected Technology.

The retailer has continued to expand its digital presence, with online sales soaring 23% to $258 million
(5.5% of total sales).

The company’s Solutions business reported double digit sales growth, and is on track to deliver and aspirational sales target of around $500 million per annum.

Gross profit for JB Hi-Fi Australia lift 3.9% to $1.05 billion, with gross margin notching 22.1%.

The retailer claims its low CODB remains a “competitive advantage”, lifting 14.9% (up 7 bps on the pcp).

“It was a solid result for JB Hi-Fi Australia and a particularly pleasing finish to FY19 with strong sales in the key tax time promotional period,” adds Mr Murray.

JB Hi-Fi New Zealand notched a 2% lift in total sales to NZ$236.2 million, with comparable sales up 8.2%.

Online sales in New Zealand soared a whopping 38.3% to NZ$13.3 million (5.6% of total sales).

The Good Guys reported a 2.2% increase in total sales to $2.15 billion, with comparable sales lifting 0.9%.

Gross profit notched $442.7 million, with gross margin up 33 bps to 20.6%.

EBIT lift 19.8% on the pcp to $72.9 million, with EBIT margin up 50 bps to 3.4%.

Key growth categories for the retailer included Refrigeration, Laundry, Dishwashers, Televisions, Communications and Computers.

Strong sales on The Good Guys website partially offset a decline in third party marketplace sales.

Online sales for the retailer lift 3.7% to $130.9 million (6.1% of total sales).

In a trading update, JB Hi-Fi Australia reported a total sales growth of 4.1% for July 2019, up from 2.9% in July 2018. Comparable sales growth notched 3.2% versus 0.3% last year.

JB Hi-Fi New Zealand post a -0.4% total sales growth for July 2019, up from -2.1% for July 2018. Comparable sales growth hit -0.3%, down from 3.4% in July 2018.

The Good Guys reported a -2.1% total sales growth for July 2019, down from 2.7% last year. Comparable sales growth hit -3.4%, up from 1.4% in July 2018.

For FY20, the Group expects total group sales to hit circa $7.25 billion: JB Hi-Fi Australia $4.84 billion, JB Hi-Fi New Zealand NZ$0.24 billion, and The Good Guys $2.18 billion.

“I would like to recognise and thank our 12,500 team members across Australia and New Zealand who have delivered another record result in FY19,” claims Mr Murray.

“Whilst we continue to see variability in the sales environment, we enter FY20 confident in our ability to execute and grow market share and look forward to another successful year.”

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