JB Hi-Fi made sure a surprise change in management for the recently acquired Good Guys operation didn’t hurt the share price.
The company confirmed its earnings and sales forecasts for the year to June when it announced the return of former CEO Terry Smart to the company to run The Good Guys following the surprise departure of long-serving chief Michael Ford.
JB Hi-Fi bought the The Good Guys from the founding Muir family last September for $870 million, lifting its share of the $4.6 billion home appliances market from 3% to 29% and its share of the electronics market from 19% to just on a quarter.
Michael Ford, who had been chief executive of The Good Guys for 12 years, had been expected to stay at the God Guys to oversee the integration process.
However, JB Hi-Fi CEO Richard Murray said yesterday Ford had resigned and would leave on April 28.
To make sure there was no impact on the share price, JB Hi-Fi told investors that Ford’s departure was not due to a deterioration in sales and earnings.
Murray reaffirmed JB Hi-Fi’s guidance for group sales of about $5.58 billion (JB Hi-Fi $4.33 billion and The Good Guys $1.25 billion) and underlying net profit of between $200 million and $206 million, an increase in the range of 31.4% – 35.4%.
The company said its march quarter sales rose more than 10% on a topline basis and 8.2% on a comparable store sales.
That was far smarter than The Good Guys which experienced a slower 2.6% rise in total sales and comparable store sales growth of 1.2%.
It worked because JB Hi Fi shares rose 3.9% at the close to $25.36. That was in a market that fell 0.3% or nearly 20 points.
The solid sales figures for JB Hi tells us that management and quality of delivery and execution of strategy is a determining factor in sales performance.
