Shares in leading electronics and whitegoods retailer JB Hi-Fi rose strongly yesterday after it unveiled a better-than-expected result for the first half of the new financial year.
The company told the ASX that sales and profits fell as Covid driven lockdowns, staffing problems and then the devastating Omicron wave hit consumers and staff.
Group sales for the half fell 1.6% to $4.86 billion, and net profit after tax dropped 9.4% to $288 million.
The shares ended the day up more than 6% at $49.84 after rising above $50.
JBH’s performance and update was similar to that from Wesfarmers on Monday and the market reaction was similar – relief that the actual outcome wasn’t worse.
And while the full year result will battle to match 2020-21’s record, it will be stronger than after the first quarter warning last year.
In an update to investors on Tuesday morning, JB Hi-Fi CEO Terry Smart said the company’s first-half results were looking strong despite “challenging circumstances”.
The company had warned investors in October of a sharp fall in first-quarter sales due to the effects of persistent lockdowns across Victoria and NSW following the outbreak of the Delta COVID-19 variant.
Since then, retailers have also been hurt by the Omicron wave which has seen infections skyrocket, causing staffing shortages in supply chains and other key industries and making shoppers more reluctant to leave home.
Online sales remain solid but, while they have continued to grow, the rate is not huge as it was in 2020 and 2021 and not enough to fully make up the shortfall in sales from bricks and mortar outlets.
Online sales made up 22.1% of total group sales for the half year.
A small positive was that JB Hi-Fi grew sales 1.2% over the key Christmas period, and its whitegoods arm, The Good Guys reported a 2.8% improvement, with shoppers showing an appetite for consumer electronics and home appliances.
Online sales, a key point of growth for retailers such as JB Hi-Fi during the pandemic, continued to soar, growing 62.6 per cent to $1.1 billion for the half.
“We are pleased to report strong sales and earnings for HY22. In challenging circumstances, we have again demonstrated our ability to adapt and respond to meet the strong demand from our customers, both in-store and online,” Mr Smart said.
JBH said its earnings before interest and tax “ as strong at $420.5m, down 9.1% on last year, but up 59.9% over a two-year period with significant operating leverage driven by the elevated sales growth, management of gross margins and disciplined cost control.”
The Group will release its half year audited results on February 14, including the size of the interim dividend.
