JB Hi-Fi : ‘Home’ The Place To Be (& Why TVs No Longer A “Drag”)
The only way is appliances, as demand for white goods fires up JB Hi-Fi sales 7% to $1.94 billion, lifting profits up 10% to $90 million for HY14.
There was demand growth across all tech categories, JB Hi-Fi Ceo Terry Smart told CN, although software sales slumped, as consumers move to digital downloads.
“We’re very encouraged by the solid result,” for the half year to Dec 31. Shares soared over 2% today to $18.3.
JB Hi-Fi Home was a real driver in the half year HY14 with white goods sales +13.6% to $3m although from a low base, outrunning hardware growth (+ 11%)
JB Hi Fi is eyeing the $4.6bn appliance market opportunity, citing “potential” for around 50 Home stores by 2017.
There’s great demand for both large and small goods, Smart told CN – washing machines, dishwashers and demand for premium end “smart” connected appliances is now building momentum.
“The JB Hi-Fi consumers loves technology and that translates from Home Entertainment to Appliances and we’re seeing more connectivity in appliances.”
JB set up its first Home stores 14 months ago, and now has 16, which will rise to 22 with plans to convert six existing electronics stores, not yet identified, by FY14.
The retailer’s 182 Aussie-based stores were the main driver of sales growth – up 6.5% (like-for-like 2.3%), while NZ rose just 0.5%.
But its not just washing machines drumming up JB’s bottom line.
Demand for other technology including consoles (PS4, Xbox One), TV’s and tablets rose 11%, with ‘Visual’ category enjoying a marked rebound.
Demand for TV’s has stabilised Smart confirmed, and is “no longer a drag on (comparative) stores performance.”
“OLED, Ultra High Definition or 4K TV are definitely assisting growth,” he added.
There was good Average Selling Prices (ASP) across the visual category.
Tablets including iPad, Samsung Tabs and Co are still enjoy boom demand and “we’ll continue to maximise that opportunity,” he says.
“We continue to have many opportunities for growth in our traditional categories with the opening of new stores, market share gains and expansion of our commercial division.”
However, it wasn’t such good news for software sales, with less consumers rummaging through JB Hi-Fi shelves for DVDs and games.
Software sales slumped 8%, was “as expected”, as online cannibalise brick and mortar sales. Hardware now account for 80% of sales – up 4% – while software has shrunk to 20%.
It isn’t all bad on the gaming front, and “we continue to benefit from industry consolidation that may take place,” Smart notes.
JB are moving to online video downloads platform, to be launched soon, and there’s also “potential” for a similar online gaming platform in the future.
So, does the 7% lift in sales mean consumer spending is back on track after a period of scrimping and saving?
Not quite says its CEO, but “we have confidence things may be improving.”
But one can never be certain.