The good news continues to flow for JB Hi-Fi and its shareholders.
The company told shareholders at yesterday’s annual meeting that there were signs conditions were on the improve.
So much so, that while maintaining its previous strong guidance for the current year, the company has boosted its planned new store openings this year
"While the economic outlook remains unclear, we are encouraged by recent signs the Australian economy and consumers are feeling more confident than this time last year," CEO Richard Uechtritz told the annual meeting yesterday.
"Coupled with JB’s focus on home entertainment and with the all important Christmas and New Year trading periods ahead of us, the company remains confident that it will meet market expectations."
This improved consumer confidence was underlined yesterday by the latest survey from Westpac and the Melbourne Institute which showed sentiment at a near 28 month high in October.
That survey was taken after the rate rise last week, which underlines the more resilient nature of consumer confidence than earlier in the year.
This has been helped by the federal government’s stimulus spending, which has cushioned the fall in employment, and helped retailers in particular.
"We maintain our previous sales guidance of circa $2.8 billion or a 20 per cent increase on the 2009 financial year," JB Hi-Fi chief executive Richard Uechtritz told shareholders."
"In August 2009 we reported that sales were in line with internal expectations and comparable store sales were 3.8% for the first five weeks of the new financial year and that comparable store sales had been impacted by strong visual sales from the Olympics in the prior year.
"Today, we report that sales for the 1st quarter of financial year 2010 continue to be in line with internal expectations and comparable store sales were 8.4% for the quarter," Mr Uechtritz said.
The electronics retailer unveiled in August a 45% jump in net profit to a record $94.4 million for the year to June 30, exceeding its guidance for a $92 million net profit due to stronger than expected sales.
JB Hi-Fi also at the time reported a 27% increase in sales for the 12 months to $2.33 billion and said that sales for July and August had met internal expectations, with expected sales for fiscal 2010 to be up 20% to $2.8 billion.
That’s on track and the shares bounced past the $19 mark yesterday and ended up 92 cents, or nearly 5%, at $19.42.
"During the year we opened 19 new stores. Seven of these stores were in Western Australia, four in Queensland, two in the Australian Capital Territory, one each in Victoria, South Australia and New South Wales, and three in New Zealand," shareholders were told by the CEO.
"By Christmas this year we will have opened 15 new JB Hi-Fi stores since 1 July, taking the group’s total store network to 137.
"In September 2009, one Hill & Stewart store in New Zealand was also converted to a JB Hi-Fi store. The total stores across the group’s brands at Christmas will include 11 Clive Anthonys stores and 4 Hill & Stewart stores.
"At our August 2009 results release we indicated we would open 18 new JB Hi-Fi branded stores, we now forecast approximately 22 new stores in FY10, an increase of 4 on our recent guidance," he said.
JB is a big gainer from the federal government’s stimulus spending.
Meanwhile discount variety retailer The Reject Shop Ltd is maintaining its previous guidance for 14% rise in 2010 earnings.
Shareholders were told yesterday in Melbourne that its new store opening program has added to sales. (Like JB Hi-Fi.)
The retailer said its confident of achieving a net profit of between $21.4 million and $21.6 million for the financial year.
It said while the first six weeks of the financial year had been impacted by inventory imbalances, the company said new stores had added additional sales above initial expectations.
"Year to date our comparable store sales growth is flat but we expect the recent trend to continue and anticipate the remainder of the half to produce comparable sales growth of around 3%, bringing the first half comparable sales growth to around 1.5%.
"However, the new store opening program has added some additional sales above initial expectations.
"Pleasingly we have addressed the situation quickly and comparable store sales growth has been increasingly positive since mid August with recent weeks particularly strong."
