By Grant Shepherd
JB Hi-Fi Limited has announced a record half yearly net profit of $76 million from $1.554 billion in sales for the six month period ending 31 December 2009. This equates to a 29 per cent increase in net profit and a 23 per cent growth in sales compared to the same period last year.
JB Hi-Fi witnessed comparable store sales growth of 9.9 per cent (Australia 10.2 per cent, New Zealand 5.8 per cent) and gross margins remained stable, down 26 basis points, despite competitor discounting and the strong performance of low margin categories.
JB’s cost of doing business was down 39 basis points for the period to 13.2 per cent (HY09 13.6 per cent), EBIT margin increased 10 basis points to 7.2 per cent (HY08 7.1 per cent) and cash flow from operations was at $168.4 million.
JB Hi-Fi CEO Richard Uechtritz, commented on the company’s strong result.
“We are once again extremely pleased with this strong result, particularly the comparable store sales growth of 6.5 per cent in December, when compared to the prior corresponding period, which was impacted by the government’s stimulus package,” he said. “JB has proven to be very resilient throughout the economic downturn which led to low consumer confidence and spend. This performance is testament to our strong retail model and the depth and strength of our management team.
“We continue to grow our market share as recently opened stores mature, we open new stores, expand our offering and reduce our prices on the back of increased economies of scale and a continued focus on costs.”
JB Hi-Fi opened 15 stores in the half and is expected to open a further seven new stores in the second half of FY10. This total of 22 new stores will be the largest number of store openings in a year since the company’s formation.
According to the results, JB Hi-Fi’s sales for January have met internal expectations with comparable store sales at 7.2 per cent. Although the outlook for the economy is still uncertain, the company is optimistic that it will have another strong year.
“JB confirms its previous guidance that sales will be circa $2.8 billion or a 20 per cent increase on the prior financial year, and expects Net Profit after Tax to be in the range of $117 million to $120 million or a 24 per cent to 27 per cent increase on the prior year.”