JB Hi-Fi Post Record Half-Year Sales, Profit Up 5.5%
Despite a slump in Australian retail turnover, JB Hi-Fi Limited has post a 5.5% lift in half-year net profit after tax to $160.1 million, with total sales climbing 4.2% to $3.8 billion.
For the half-year ending December 31, group EBIT jumped 4.8% on the pcp to $236.6 million, with earnings per share up 5.4% to 139.4 cps.
“We are pleased to have delivered record sales and earnings in the first half, 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 company has announced an interim dividend of 91 cps – up 5.8%.
For the half-year, sales at JB Hi-Fi Australia climbed 4.7% to $2.59 billion, with comparable sales up 3%.
Key growth categories included; games hardware, audio, communications, fitness and connected technology.
Online sales soared 21% to $144.4 million (i.e. 5.6% of total sales).
Gross profit for the division increased 5.2% to $573.6 million, notching a gross margin of 22.1%.
The company asserts total operating costs have remained “well controlled.”
Divisional EBIT lift 4.5% on the pcp to $191.9 million, with EBIT margin flat at 7.4%.
JB Hi-Fi Australia’s solution business has recorded double digit sales growth for the half-year, and claims to be on track to deliver a longer-term aspirational sales target of ~$500 million per annum.
For JB Hi-Fi New Zealand, total sales lift 5.8% to NZ$131.8 million, with comparable sales up 12.6%.
Online sales for the division soared a whopping 65.4% to NZ$7.9 million (i.e. 6% of total sales).
“We are encouraged by the improved performance in New Zealand, particularly the strong comparable sales growth which is evidence that our offer is resonating with customers,” asserts Mr Murray.
“We continue to re-position the business which has included the closure of a loss making store in July, and in October the appointment of a local Managing Director, Cherie Kerrison.”
For the half-year, total sales at The Good Guys lift 2.8% to $1.13 billion, with comparable sales climbing 1.5%.
Key growth categories included; refrigeration, laundry, floorcare, televisions, communications and computers.
Whilst sales from The Good Guys’ website “grew strongly” in the half-year, a decline in third party marketplace sales saw HY19 online sales dip 2.4% to $70.7 million (i.e. 6.3% of total sales).
Gross profit for The Good Guys hit $233.2 million, with gross margin (20.6%) slightly down on the pcp, however, a “significant improvement” from H2Y18.
Operating costs remained in line with expectations, with CODB notching 16.2%.
EBIT lift 3.9% on the pcp to $43.7 million, with EBIT margin climbing 4 bps to 3.9%.
“We [The Good Guys] are pleased to deliver positive sales and earnings growth in the first half of FY19, a significant improvement on our performance in the second half of FY18,” claims Group Chief Executive, Richard Murray.
“We enter the second half excited by the opportunity to continue growing one of Australia’s leading retail brands.”
For January 2019, JB Hi-Fi Australia reports 3% total sales growth, with comparable sales growth of 1.5%. It’s down from 7.5% and 4.8% respectively, in January 2018.
Total sales growth for JB Hi-Fi New Zealand slipped 1.8% in January 2019, with comparable sales growth of 4.1%. It’s an improvement from a 2% drop and 2.1% lift, respectively in January 2018.
Total sales growth for The Good Guys jumped 1.8% in January 2019, versus a 3.5% decline last year. Comparable sales growth lift 0.3%, up from a 4.7% dip recorded January last year.
Despite positive sales growth, the Group has acknowledged “increased volatility and a bias in customer purchasing” towards key promotional periods – specifically in the Christmas quarter and January 2019.
Concerning FY19 guidance, total group sales are expected to notch $7.1 billion comprising; $4.73 billion from JB Hi-Fi Australia, NZ$0.24 billion from JB Hi-Fi New Zealand, and $2.15 billion from The Good Guys.
Total group net profit after tax is expected to be between $237 million and $245 million, up between 1.6% and 5.1% on the pcp.
During the year, the group expects to open five new JB Hi-Fi Australia stores, and two The Good Guys stores. It also plans to close two JB Hi-Fi Australia stores and one JB Hi-Fi New Zealand store.