JB HI-FI Ltd earnings results

CommSec CommSec

 

12 August 2019

Results 

Full Year 2019

Full Year 2018

Change

Total Sales Revenue ($m)

7,095.3

6,854.3

+3.5%

Bloomberg Consensus ($m)

7,094

 

 

Earnings Before Interest and Tax (EBIT) ($m)

372.8

350.6

+6.4%

EBIT Margin (%)

5.25

5.11

+14bps

Net Profit After Tax ($m)

249.8

233.2

+7.1%

Bloomberg Consensus ($m)

243.3

 

 

Final Dividend ($)

0.51

0.46

+10.9%

JB Hi-Fi (JBH) lifts sales despite tougher retail conditions

Results

  • Retailer, JB Hi-Fi (JBH) has reported record sales and earnings for the year ending 30 June 2019. Total sales lifted 3.5% to $7.1 billion, meeting analyst expectations as surveyed by Bloomberg. Earnings before interest and tax (EBIT) saw a 6.4% improvement to $372.8 million while net profit after tax (NPAT) rose 7.1% to $249.8 million.

Drivers

  • The lift in total sales was driven primarily by the performance of its Australian JB Hi-Fi stores, which makes up nearly two-thirds of all sales. Total sales grew 4.1% to $4.73 billion while comparable sales edged 2.8% higher. A strong sales period in the end of financial year tax period drove Q4 sales up. 
  • Australian online sales also rose 23% to $258 million and only represents 5.5% of total Australian sales. While sales and gross profit rose for the year, margins were slightly depressed, falling 4bps to 22.14% on weaker sales in higher margin software categories (CDs and DVDs) while the cost of doing business (CODB) lifted 7bps to 14.89%. JBH’s NZ business saw sales of NZ$236.2 million, up 2% but comparable sales jumped 8.2%. Online sales also surged 38.3% from an improvement in its online platform.
  • The Good Guys contributed $2.15 billion (30% of total sales) in sales over the period, up 2.2% on the year before. Comparable sales were up 0.9% for the period with key growth categories being refrigerators, dishwashers, laundry, televisions and computers. Online sales strengthened on the Good Guys website but gains were partially offset by a decline in third party marketplace sales (such as eBay).

Dividend

  • JBH is paying a fully franked final dividend of $0.51 per share on 6 September 2019. The ex-dividend date will be 22 August 2019. This lifts JBH’s total FY19 dividend to $1.42 per share (65% payout ratio), up 7.6% on FY18.

Outlook

  • JBH anticipates total FY20 sales of roughly $7.25 billion, or ~2% higher on FY19. JBH Australia sales are expected at $4.84 billion with $0.24 billion from JBH NZ and $2.18 billion in sales from the Good Guys. 
  • JBH also provided an update for July 2019 sales. JBH Australia was the only division to lift sales growth over the month, with total sales growth of 4.1% while comparable sales rose 3.2%. Both JBH NZ and the Good Guys saw sales decline over July 2019.

Share price

  • The result has been well received by investors with the share price jumping as much as 8% following the announcement. JBH shares have also performed strongly so far in 2019 with its share price outperforming and roughly doubling the percentage gains made by the ASX 200 year to date. 

 


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