Electronics retailer JB Hi-Fi doesn’t seem too phased by the fragile retail environment, posting a record 31.7 percent increase in its half-year net profit after tax, of $125 million. Online sales performed well, with a 40 percent rise over the period.
JB Hi-Fi is a beacon in today’s troubled retail sector. The multichannel released its half-year results, siting a 23.6 percent rise in sales to $2.6 billion for the six months ending December 2016, as a major reason for its record net profit figures.
The company’s online sales climbed 40 percent in the December half and now represents almost 4 percent of total sales. This is however relatively low given that JB Hi-Fi entered the e-commerce game early in Australia, with online retail now representing approximately 7 percent of its total retail sales.
The company indicates that it has its sights set for more net profit growth come full year, forecasting between $200 million and $206 million – that’s an increase of 31.4 percent to 35.4 percent.
JB Hi-Fi’s chief executive Richard Murray says he expects the company to reach total year sales of $5.58 billion, with The Good Guys contributing $1.25 billion to this.
“We are pleased to have delivered record sales and earnings results for the half. It has been a particularly strong 12 months for JB Hi-Fi business in Australia and we are pleased to have successfully completed our acquisition of The Good Guys,” said Murray.
Amidst other retailers releasing discouraging Christmas and New Year sales, JB Hi-Fi saw 9.8 percent growth in December 2016, followed by 7.2 percent in January. This is in line with last week’s official retail sales figures from the Australian Bureau of Statistics for December 2016, which showed that the top performing categories in retail were electrical goods, jewellery and footwear.
With a string of retailers going into liquidation lately, the company provides some inspiration in the marketplace. Last week, upmarket fashion chains Herringbone and Rhodes and Beckett called in the administrators. The previous week saw apparel retailers Marcs and David Lawrence put on the brakes. While Pumpkin Patch, Payless Shoes and Dick Smith have gone broke.
JB Hi-Fi’s share price rose by 1.6 percent this year, but this is below its highest value, which was last August sitting at $31.19.