Double-digit online growth the icing on the cake at JB Hi-Fi
10 February 2020, Written by Matt Ogg
Online sales continue to contribute double-digit growth across the retailer's divisions in Australia and New Zealand.
A strong first half has meant profits could be as much as 8 per cent higher for the full year at electronics and home appliances retailer JB Hi-Fi (ASX: JBH), with sales forecasts lifted by $80 million.
The group expects net profit after tax (NPAT) to be in the range of $265-$270 million for FY20, after hitting $4 billion in sales for the first time over a six-month period.
The company, which own its namesake retailer in Australia and New Zealand as well as home appliances icon The Good Guys, is now on track to achieving total sales of $7.33 billion.
Total sales were up across the board but JB Hi-Fi Australia was by far the strongest performer, notching 5.1 per cent growth in total sales to $2.72 billion while comparable sales rose 4.4 per cent.
This time last year the Australian business received around 5.6 per cent of its revenue from online sales, but that share has now grown to 6.3 per cent at $170.8 million following growth of almost a fifth.
The New Zealand JB Hi-Fi stores have seen even faster growth in online at 22.3 per cent to NZD9.6 million (7.3 per cent of total sales), but comparable sales for offline were only marginally higher by 0.8 per cent.
"We are pleased to have delivered positive comparable sales growth in the first half in New Zealand as we cycled very strong sales in the prior year," says CEO Richard Murray.
"We are encouraged by the improvements made over the last 18 months and remain focused on delivering on our plan to reposition our New Zealand business."
Total sales grew by 1.5 per cent at The Good Guys to reach $1.15 billion, with comparable sales up 0.6 per cent. Key growth categories were dishwashers, floorcare, cooking, communications and computers.
The retailer, founded in 1952 and was acquired by the group for $870 million at the end of 2016, delivered online sales growth of 12.6 per cent to $79.6 million.
This represents 6.9% of total sales after strong sales on The Good Guys' website were partially offset by a decline in third-party marketplace sales.
"We are pleased to deliver positive sales and strong earnings growth in the first half of FY20, with sales improving throughout the half and culminating in a strong Christmas quarter," says Murray.
"In a competitive environment we remained focused on growing sales and market share in a sustainable manner whilst continuing to evolve the business."
The company also announced its chairman Greg Richards would retire from the board and as a non-executive director on 30 June 2020.
Richards will be replaced by retail veteran Stephen Goddard, who was appointed to the board in August 2016 and has previous leadership experience at David Jones, Officeworks and Myer.
JBH shares were up 8.43 per cent at $3.38 at 11:50am AEDT.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg