Retailer profitable again after sales boost
JB Hi-Fi’s New Zealand unit is back in profit, and the company has raised its guidance for sales this side of the Tasman.
The electronics retailer generated earnings before interest and tax of $1.1 million in the six months ended December 31 — up from from zero a year earlier. Sales rose 5.8 per cent to $131.8m. JB Hi-Fi forecasts New Zealand revenue of $240m in the year ending June 30, up from a previous forecast of $220m.
The retailer closed a loss-making store in New Zealand in the period and has appointed a new managing director, Cherie Kerrison, to help focus the drive for profitability. JB Hi-Fi started repositioning the Kiwi business in 2016, pulling out of whiteware retailing.
“We are encouraged by the improved performance in New Zealand, particularly the strong comparable sales growth,” group chief executive Richard Murray said in a statement.
The retailer’s New Zealand comparable sales were up almost 13 per cent in the period, with communications, games hardware, fitness, and accessories singled out as areas of strong growth. That helped shrink its cost of doing business to 15.66 per cent from 16.31 per cent a year earlier.
Online sales jumped 65 per cent to $7.9m in the half, accounting for 6.9 per cent of New Zealand revenue. Since the start of the year, New Zealand sales fell 1.8 per cent, although comparable sales were up 4.1 per cent.
JB Hi-Fi’s group sales rose 4.8 per cent to A$3.8 billion ($3.98b) in the half, for a 5.5 per cent increase in net profit to A$160.1m. The board declared an interim dividend of 91 Australian cents per share, payable on March 8. The group expects to report annual revenue of A$7.4b and a net profit of $237-245m , an increase of 1.6-5.1 per cent from a year earlier.