Lockdown lift for JB Hi-Fi

Electronics retailer hikes guidance as sales surge

JB Hi-Fi has bumped up its full-year profit guidance following a surge in sales since March as customers forced to work from home increased demand for home appliances and technology products.

The electronics and appliances retailer yesterday said comparable sales at its JB Hi-Fi Australia stores in the second half of the financial year were up 20 per cent compared to 4.4 per cent in the first half.

Sales at subsidiary chain The Good Guys, which focuses on electrical and home appliances, were up 23.5 per cent compared to 0.6 per cent in the first half. Shares in JB Hi-Fi hit their highest level in four months, at $43.86, after the announcement.

The continued sales growth amid coronavirus-related restrictions comes on the back of an 11.3 per cent increase in comparable sales in Australia in the March quarter.

“The group has seen strong sales growth in the second half of FY20 in JB HI-FI Australia and The Good Guys as customers spend more time working, learning and enjoying entertainment at home,” the company said in a statement.

The elevated sales growth, combined with disciplined cost control, had more than offset the additional operating costs associated with ensuring safety for staff and customers during COVID-19, it said.

“Our customers have continued to turn to us for their technology and home appliance needs and our team members have responded and adapted in an amazing manner to make sure we can do it safely and effectively,” group chief executive Richard Murray said. As a result, FY20 sales to date on a comparable basis are up 10.7 per cent at JB Hi-Fi Australia and up 10.3 per cent at The Good Guys.

The group did feel a negative impact of COVID-19 at its 14 New Zealand stores, which were closed in March and April due to social restrictions. The group is reviewing the carrying value of its New Zealand business and said it would take a non-cash impairment of $25 million in its full year accounts. JB Hi-Fi said all New Zealand stores have resumed full trading and initial sales performance has been solid.

The retailer also reinstated and upgraded its FY20 sales and earnings guidance after withdrawing its initial forecast in March amid the uncertainty arising from COVID-19.

The group now expects fullyear sales to be $7.86 billion, up from $7.1 billion last financial year, while net profit is expected to be 20 to 22 per cent higher, in the range of $300 million to $305 million.