JB Hi-Fi posts record sales, better-than-expected profit consumers splurge on new tech

JB Hi-Fi customers have cast aside higher cost-of-living pressures to splurge on the latest gadgets, helping the electronics and appliance behemoth post record sales and a better-than-expected profit.

But new boss Nick Wells on Monday warned sales growth had slowed in January following strong Black Friday and Boxing Day trading.

The retail bellwether — which also owns JB Hi-Fi New Zealand, The Good Guys chain and home appliance and bathroom retailer e&s — posted a 7.3 per cent jump in half-year revenue to a record $6.1 billion as net profit lifted 7.1 per cent to $305.8 million. Both results were one per cent ahead of consensus.

Pre-tax earnings hit $454m, 8.1 per cent higher than the same time last year and 2 per cent ahead of consensus.

Shares in JB Hi-Fi were 7.9 per cent higher to $82.48 in morning trade as investors focused on the company’s profit, earnings and sales results that beat estimates despite the softer trading update for January.

At the flagship JB Hi-Fi Australia stores, sales increased by 6.3 per cent to $4.12b in what the company said was “driven by continued customer demand for technology and consumer electronics products, and strong promotional execution”.

The key growth categories were mobile phones, small appliances, games hardware, computers and fitness. Pre-tax earnings rose 7.7 per cent to $340.9m.

At JB Hi-Fi New Zealand, sales grew 32.6 per cent to $NZ268.6m ($228.9m).

The retailer said The Good Guys benefited from Black Friday and Boxing Day promotional periods as customers splurged on portable appliances, floorcare, cooking, refrigeration and laundry.

Mr Wells, who last October replaced long-serving chief executive Terry Smart, said electronic devices, particularly mobile phones, were increasingly becoming less discretionary for customers.

“I think the replacement nature of (The Good Guys) does absolutely provide some protection (against interest rates),” Mr Wells told investors on a call.

“In JB, what we’ve seen over the last few years is that tech is becoming less and less discretionary as well. People are prioritising their spend on mobile phone above other things.”

Sales for the December half at its recently acquired e&s division hit $144.8m.

The retailer rewarded investors with a 23.5 per cent hike in its interim dividend to $2.10 a share.

In January, comparable sales were up 2.4 per cent at JB Hi-Fi Australia, up 16.7 per cent at JB Hi-Fi New Zealand, up 2.7 per cent for The Good Guys but down 7.9 per cent at e&s.

“Whilst we are pleased to see sales growth continue in January in JB Hi-Fi and The Good Guys, cycling strong sales in the prior year, we remain cautious given the uncertainty in the retail market and the continued competitive activity,” Mr Wells said.

Jarden analyst Ben Gilbert said it was “another quality result” for JB Hi-Fi.

“JB’s executing well, balance sheet in good shape and structural support via AI take up, replacement cycle and housing strength, not withstanding rising rates,” he said.