Sales At JB HI-FI & The Good Guys Surge By Over 20%
In the second half of FY20 to 31st May JB HI-FI Australia’s sales increased by 20%, while The Good Guys’ grew by 23.5%.
Given the more stable circumstance, JB HI-FI has reinstated its full-year guidance for FY 2020, forecasting sales to rise 10.8%.
In light of the sales growth so far and the “ongoing strong performance through April and May”, JB HI-FI has estimated that total sales will amount to $7.86 billion.
Given JB HI-FI’s success in absorbing the higher costs of COVID-19, profits for the full financial year are expected to grow by 20-22% to $300-305 million – at twice the rate of sales growth.
“The Group has seen strong sales growth in 2H20 in JB HI-FI Australia and The Good Guys as customers spend more time working, learning and enjoying entertainment at home,” the Group stated in its trading update.
“Strong operating leverage from the elevated sales growth, combined with disciplined cost control, has more than offset the investment in additional operating costs associated with ensuring team members and customers remain safe during COVID-19.”
JB HI-FI implemented a range of measures to make their stores safe for employees and customers, which understandably expanded usual operating costs. This included increasing cleaning, adding security to limit customer numbers in-store, and purchasing protective equipment.
The group has been inventive in keeping these COVID-related costs down.
JB HI-FI CEO Richard Murray told Chanticleer: “We could have spent a whole lot of money on queuing systems, but we’ve got a lot of yellow wrap and plasma TV boxes.”
During the first half of FY20 JB HI-FI Australia’s sales grew by 5.1%, while The Good Guys recorded growth of 1.5%.
Despite temporary store closures, JB HI-FI New Zealand recorded sales growth of 19.3% in H2 FY20 to date.
While sales growth in New Zealand has been solid since reopening, the group is reviewing the carrying value of certain assets, which is expected to result in a non-cash impairment in JB HI-FI New Zealand of approximately $25 million in FY20.
Group management said they are in the process of finalising a reward programme for staff in recognition of their extra efforts during the COVID-19 pandemic, and said this would be shared with its 12,000 team members before the end of the financial year.
Yesterday JB HI-Fi’s share price closed at $42. Today the share price fell by 1.52%.