Big spenders help JB Hi-Fi join party
JB HI-FI is in the midst of a retail boom, prompting chief executive Richard Murray to pay tribute to an economy he said was in “remarkably” good shape.
Mr Murray on Monday revealed trading accounts for the December half that would typically be the result of a thriving economy, not the pandemic-induced recession Australia is experiencing.
He was followed by Super Retail, owner of retail chains Supercheap Auto, Macpac, BCF and Rebel, which produced on Monday its own set of spectacular sales and earnings forecasts for the first half of 2021.
It sets up the broader retail sector for a profit season that is likely to shoot the lights out on investor and analyst expectations.
The JB Hi-Fi and Good Guys boss said first-half profits were expected to spike by 86.2 per cent to $317m and The Good Guys would report a thumping 142 per cent profit gain to $126.5m.
“No doubt there will be volatility continuing into 2021, as much as we don’t want it, I’m sure there is, but I think the economy is in a remarkably good position given the amount of things that have been thrown at it,” he said. “Given the negatives I am pleasantly surprised just how well the Australian economy is weathering this and the government has done a great job from that regard.”
Mr Muray said the raft of government stimulus combined with high personal savings rates meant consumers had “money to spend” and were filling their homes with TVs, computers, fridges and new mobile phones. Australians stuck at home and unable to travel overseas also tipped in tens of billions of dollars into discretionary spending, which the retail sector was gobbling up.
Such was the demand from consumers and their eagerness to spend, Mr Murray said in terms of his own business, which includes The Good Guys chain, there had been strong sales across all categories — something he had never witnessed before.
The preliminary results for JB Hi-Fi come as the retailer has squeezed far larger profit growth from its sales, which lifted 23.7 per cent to $4.94bn, according to the unaudited figures released on Monday.
It will publish its half-year results on February 15.
Super Retail unveiled its own trading update on Monday, pledging to repay the JobKeeper payments it received during the first half of the financial year after flagging a 201 per cent rise in net profit for the period. In a statement to the ASX the retailer said it expected normalised profit for the 26 weeks to Boxing Day of between $174m and $177m, up 135 per cent to 139 per cent.