JB HI-FI Ltd earnings results

CommSec CommSec

 

11 February 2020

Results 

Half Year 2020

Half Year 2019

Change

Total Sales ($m)

3,995.2

3,843.7

+3.9%

Bloomberg Consensus ($m)

3,948.0

 

 

Earnings Before Interest &Tax ($m)

255.6

236.6

+8%

Net Profit ($m)

174.4

160.1

+8.9%

Bloomberg Consensus ($m)

166.5

 

 

Earnings Per Share (cents)

151.8

139.4

+8.9%

Interim Dividend ($)

0.99

0.91

+8.8%

JB Hi-Fi (JBH) rises above a challenging retail environment

What happened?

  • JB Hi-Fi (JBH) posted a 6.6% lift in half year net profit after tax (NPAT) to $170.6m, which was ahead of analysts’ expectations according to Bloomberg. The company is comprised of two key brands; JB Hi-Fi, whose focus is selling consumer electronics and The Good Guys, which concentrates on the sale of home appliances.
  • JBH will pay shareholders an interim dividend of 99 cents per share fully franked, an increase of 8.8% compared to the same payment this time last year. The interim dividend will be paid on 6 March 2020

Why did it happen?

  • JBH saw a 3.9% increase in total sales over the first half of the year; an increase of $151.5 million to $3.99 billion. This was driven by a strong performance in the Australian business, which made up the lion’s shares of sales and rose by 5.1% to $2.72 billion. Comparable sales, which take into consideration new store openings, rose by 4.4% during the period. The product categories that were most popular with customers were communications, audio, computers, visual and accessories. While online sales still only make up a small proportion of sales, revenue jumped by more than 18%.
  • JBH said it was encouraged by sales in the Christmas period, which rose by 4.8%, compared to the same time last year (based on the same number of stores). Equally encouraging was that Christmas momentum has carried over into the start of the new year. In January, sales for JB Hi-Fi Australia rose by 6.5 %, while comparable sales growth was up 6%. Another feature of the half was JBH keeping costs under control. JBH says its competitive focus is to stay ‘focused on productivity and minimising unnecessary expenditure’ while getting the most sales out of each square metre of floor space.
  • The Good Guys first half performance saw total sales edge higher by 1.5% to $1.15 billion, while paying particular attention to cost control. Sales improved over the half with comparable sales growth of 2.7% in the key Christmas quarter. Dishwashers, floorcare, cooking, communications and computers were the best performing categories with shoppers. The Good Guys business saw online sales grow by 12.6% to $79.6 million or 6.9% of total sales. 
  • JB Hi-Fi New Zealand saw total sales rise 0.8% to NZ$132.8 million. Online sales in New Zealand grew by 22.3% to NZ$9.6 million, or 7.3% of total sales, while EBIT was flat at NZD1.1 million.

Where to now?

  • In looking ahead to the full year JBH expects total sales to be in the range of $7.33 billion. This includes a $4.93 billion contribution from JB Hi-Fi Australia; (NZD) $0.24 billion from JB Hi-Fi New Zealand and $2.18 billion from The Good Guys business. Total NPAT is expected to between $265 million and $270 million, marking an increase of 6.1% to 8.1% compared to the full year performance in 2019.

 

 


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