Challenging trading conditions hamper JB Hi-Fi results

The current retail trading environment has hampered JB Hi-Fi Group’s half year results, reporting a dip in total sales to $5.16 billion for the half-year ending 31 December.

Earnings before tax sat at $386.7 million, down 19.3 per cent from the previous half-year while net profit dipped from $330 million down to $264.3 million. 

“We are pleased with our performance as we cycled the elevated customer demand in the prior year. As expected, we saw the trading environment become more challenging, marked by heightened competitive activity and increased on-floor discounting,” group CEO Terry Smart said. 

“Our focus remained on maximising customer demand through delivering consistently high levels of customer service and driving best value for our customers.”

In Australia, total sales increased 0.7 per cent to $3.62 billion driven by customer demand for technology and consumer electronics, however EBIT declined 13.7 per cent to A$294.6 million.

Key growth categories were mobile phones, gaming hardware, small appliances, whitegoods and services. Online sales grew 0.8 per cent to $543.1 million, making up 15 per cent of total sales. 

While in New Zealand, the business was outperforming, recording a 5.1 per cent half-year sales lift compared with an overall group revenue decline of 2.2 per cent.

The retailer’s local unit reported $168.7 million in sales for the six month to 31 December and an 8.9 per cent increase in gross profit to $28.2 million. EBIT, however, was down $5.8 million, landing in negative territory by $0.4 million.

That was in part a product of investment in new stores and other initiatives in the region, which helped push cost of doing business up by 11.9 per cent.

Online sales lifted 5.8 per cent to $20.4 million, 12 per cent of total sales.

The company’s Australian Good Guys chain, which it bought in 2016 for A$870 million, recorded a near 10 per cent decline in sales to $1.4 billion.

EBIT was down 30.5 per cent to A$92.5 million.

As reported last September, JB Hi-Fi’s FY23 net profit took a A$20 million hit, falling from A$545 million to A$525, while earnings before tax (EBIT) shrunk 3.2 per cent to $769 million.

“In a challenging retail environment, we continue to adapt and innovate to maximise the  opportunities it gives us,” Smart said. “Our unwavering focus on delivering value for our customers by leveraging our established and proven low-price market position and providing exceptional customer service continues to ensure we remain top of mind for shoppers.  

“This  strategy  not  only  ensures our continued relevance to our loyal existing customers but also drives the expansion of our market share.”