JB Hi Fi Reports Record Results Despite Dick Smith Collapse
JB Hi-Fi has reported half year sales grow of 7.7%, Sales for January 2016 were up 10.2%, online sales are up 28.9%.
Gross profit increased 7.6% to 95.2M on revenues of $2.2 Billion.
Gross margin down 3 bps to 21.7% (HY15: 21.7%). Cost of doing business was 14.3% (HY15: 14.2%), resulting in EBIT of $138.2 million (HY15: $130.0 million) and an EBIT margin of 6.5%
A major contributor to the margin downturn is believed to be a move by Dick Smith to heavily discount stock running into the peak buying period of Xmas and the New Year.
JB HI-FI CEO, Richard Murray, said “This was a solid result with trading in the important November and December periods particularly strong as we executed on a great promotional plan.”
The Company opened seven new stores in the period with the Melbourne based Company set to open a total of eight new stores in FY16 and maintains its stated target of 214 stores across Australia and New Zealand.
Of these 194 stores, 56 were JB HI-FI HOME stores, with four new JB HI-FI HOME stores opened and nine existing JB HI-FI stores converted to JB HI-FI HOME during HY16. The Company is targeting a total of circa 75 JB HI-FI
HOME stores across Australia and New Zealand.
JB HI-FI CEO, Richard Murray, said “Each new JB HI-FI HOME store contributes to growing our customer awareness, market share and supplier support.”
In addition to the HOME store roll-out, the Company continues to introduce small appliances to its existing store network as a natural progression of its proven home appliances strategy. Small appliances were introduced to 22
existing JB HI-FI stores during HY16, with up to an additional 15 existing JB HI-FI stores expected to range small appliances by the end of FY16.
The home appliances market in Australia is circa $4.6 billion, larger than many of the other categories JB HI-FI operates in, and presents a significant opportunity for the Company as it leverages the strength and trust in the JB
JB HI-FI CEO, Richard Murray, said “Appliances are a natural adjacency to our successful consumer electronics categories and accessing the $4.6 billion appliance market, via both the introduction of small appliances
to existing JB HI-FI stores and the HOME store conversions, is a significant growth opportunity for the Company.”
Out of Store
Online sales continue to grow, up 28.9% in HY16, and represent approximately 3.0% of total sales (HY15: 2.5%).
Unique visitors to JB HI-FI’s websites during the 12 months to 31 December 2015 averaged 1.3 million per week.
JB HI-FI Solutions remains on track to deliver on its longer term aspirational sales target of approximately $500 million per annum, through both organic growth and strategic acquisitions. All departments achieved solid growth
for the period.
“JB HI-FI Solutions is a key driver of our future growth. We continue with our aggressive recruitment plan as we expand our product and service offer” said JB HI-FI CEO Richard Murray.
JB HI-FI CEO, Richard Murray, said “Sales in January 2016 were pleasing given the strength in the prior year, with back to school technology purchases in both our retail and Solutions businesses driving sales.”
Murray said that the market is expected to remain competitive as retailers cycle a strong second half in FY15.