JB Hi-Fi earnings results

CommSec CommSec

 

11 February 2019

Results ($m)

Half Year 2019

 Half Year 2018

Change

Total Sales

3,843.7

3,689.8

+4.2%

Bloomberg Consensus

3,828

 

 

Earnings (EBIT)

236.6

225.8

+4.8%

EBIT margin (%)

6.16

6.12

+4bps

Net Profit (NPAT)

160.1

151.7

+5.5%

Bloomberg Consensus

155

 

 

Interim Dividend ($)

0.91

0.86

+5.8%

JB Hi-Fi (JBH) overcoming tough retail conditions as sales lift 

 

Results

  • Specialty retailer, JB Hi-Fi (JBH) has posted a 5.5% increase to its first half net profit after tax (NPAT) to $160.1 million. Total sales grew to $3.8 billion and beat Bloomberg estimates for the six months ending 31 December 2018. Earnings also improved by 4.8% on the prior corresponding period to $236.6 million.

Drivers

  • Over the half, JBH’s Australian division saw sales improve by 4.7% to $2.59 billion. Like-for-like or comparable sales were up slightly less, lifting 3%, as four new stores opened in the period. The key growth areas were communications, games hardware, audio and fitness technology. With greater competition from online retailers, online sales are also playing a bigger part for JBH Australia, growing 21% and making up 5.6% of total Australian sales. Earnings were also boosted from stronger sales and higher profit margins.
  • The New Zealand division also managed to lift earnings after a flat half the year before. EBIT came in at NZ$1.1 million with sales climbing 5.8% to NZ$131.8 million. Online sales surged 65.4% to NZ$7.9 million, benefitting from improvements to its online platform. The Good Guys also grew sales by 2.8% to $1.13 billion. Gross profit rose 2% even with a 16bp decline in gross margins. 

Dividend

  • JBH will be paying an interim dividend of $0.91 per share fully franked, up 5.8% on the previous year, and representing 65% payout ratio of its net profit. The ex-dividend date will be 21 February 2019 and will be paid on 8 March 2019.

Outlook

  • Sales growth moderated in January with trading over the Christmas quarter and January experiencing increased volatility as shoppers become savvier to sales and promotional periods. JBH is anticipating group sales to be approximately $7.1 billion for the full financial year. JBH’s Australian division is expected to account for roughly two-thirds of total sales with $4.73 billion in sales and the Good Guys business expects sales to be ~$2.15 billion. FY19 NPAT is estimated to be in the range of $237 million - $245 million. 

Share price

  • JBH shares have lifted on the back of the profit announcement, but remains short of its 12-month highs seen in early February 2018.

Tags:

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