Despite December’s retail slump, JB Hi-Fi has recorded strong limited half-year 2019 results. However, the business has also cited increasing ‘volatile conditions’ as a concern moving forward.
The consumer electrical and entertainment goods retailer has reported net profits after tax of $160.1 million, up 5.5 percent from the same period in 2018. This figure comes from total sales of $3.8 billion for the half year ended December 31, 2018. Total sales growth over the period came in at 4.2 percent.
Looking at the company’s digital arm, JB Hi-Fi reported strong online sales performance, growing 21 percent over the first half of the financial year. With total online revenue reaching $144.4 million, the company says its e-commerce offerings are continuing to evolve and now represent 5.6 percent of total retail sales.
“We are pleased to have delivered record sales and earnings in the first half, with JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys all delivering sales and earnings growth,” Group CEO, Richard Murray said in a statement on Monday morning.
Gross profit for the business grew by 5.2 percent to $573.6 million resulting in a gross margin of 22.1 percent, with operating costs reportedly remaining well controlled as the company focused on customer service, investing in strategic initiatives and managing stock volumes through its in-store network over the half.
The Good Guys also reported strong performance for HY19. Total sales grew by 2.8 percent to $1.13 billion and comparable sales were up 1.5 percent. While the group has cited strength in The Good Guys’ online channels, a decline in third party marketplace sales has led to online sales being down 2.4 percent to $70.7 million or 6.3 percent of total sales for The Good Guys.
However, the JB Hi-Fi Group has acknowledged sluggish sales in the retail sector as a whole, with peak Christmas trade moving from December to November as shopping events start to create traction earlier in the season.
The start of the calendar year has seen growth in JB Hi-Fi sales, but at a much slower pace than was obvious 12-months ago – tracking a sales boost of only 1.5 percent in January.
“In the Christmas quarter and January there has been increased volatility and bias in customer purchasing towards key promotional periods,” the business said.
Looking towards the rest of 2019, JB Hi-Fi expects total group sales to be circa $7.1 billion, attributing $4.73 billion of this predicted result to JB Hi-Fi Australia, $0.24 billion to New Zealand sales and $2.15 billion to The Good Guys.
“We are pleased with our performance in the important first half of FY19,” Murray said. “We are clear on our objectives for the next six months and are excited by the outlook for the business.”