JB Hi-Fi has concentrated on celebrating the 6.7 per cent sales growth experienced by its branded stores in Australia and New Zealand for the first half of 2012.
This has diverted attention to its 9.4 per cent fall in first-half profits from $87.9 million to $79.6 million. Likewise, EBIT was down 4.9 per cent to $120.7 million from $1.775 billion for the half year. But this was in line with the company’s trading update which was released in December 2011.
Chief executive Terry Smart highlighted the traditional three week post-Christmas sales period was challenging where weakness was driven by lower than anticipated sales in TV panels, a category in which sales are traditionally driven by heavy promotions in this period.
“While it has been a tough start to the year we expect sales to improve as we cycle out the heavy promotional period of post-Christmas and New Year sales. In our view consumers were suffering from ‘promotional fatigue’ and therefore have not reacted as well as our post-Christmas promotional offers in previous years,” he said.
Further weakness was also experienced in IT accessories and cameras. As a result, January sales were soft, with comparable store sales reporting negative 5.5 per cent.
As a result, the company said it will continue its focus on providing engaging its online and digital strategy as it attempts to refine its online presence with addition of ‘Direct Import’ cameras and ‘Factory Scoop’.
It saw online sales grow 87.7 per cent over the half year with December sales up 109 per cent.
“Our online strategy, which has been evolving over the last six years, continues to deliver solid growth. The first stage of our digital strategy, our music subscription streaming service, JB HI-FI NOW, is gaining momentum and will accelerate in growth once we launch our mobile application in the next four weeks,” Smart said.
The company expects sales in 2012 financial year to be circa $3.1 billion, a 5 per cent increase on the prior year.
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