JB Hi-Fi has confirmed that it is surviving the COVID-19 lockdown in fine style, reporting strong comparable sales growth thanks to hundreds of thousands of Australian workers being forced to work remotely or educate their children from their homes.
Like Coles and Woolies, which reported a surge in sales because of panic buying and hoarding in February and March, it was the homeschooling and remote working push from the lockdowns that helped JB Hi-Fi.
JB Hi-Fi told investors on Wednesday comparable sales at its Australian stores for the three months through March were up 11.3%, one of its highest-ever comparable growth figures for a single quarter.
That was better than the 8.5% surge in overall retail sales (seasonally adjusted) reported yesterday by the Australian Bureau of Statistics.
Investors liked the update, sending the shares up by more than 3.3% to $35.10. That was in a wider market that ended the day lower.
Sales at its whitegoods retailing arm, The Good Guys did better, showing a surprisingly strong 13.9% surge for the quarter. That was a stunning improvement from the 0.6% comparable sales increase reported at JB Hi-Fi’s December 31 interim result.
Both JB Hi-Fi Australia and The Good Guys have remained open and trading throughout the coronavirus pandemic.
In fact the latest figures are a sharp improvement on the 8.8% rise in comparable-store sales JB Hi reported in an update on March 23.
Yesterday’s announcement shows the rise in the volume of purchases in the last nine days of March was strong enough to push the total quarter’s sales up another 2.5% – which would be a satisfactory rise for the whole quarter, let alone just over a week.
JB Hi-Fi said sales into April and early May have remained strong, though JB Hi-Fi withheld guidance thanks to the ongoing uncertainty and “disrupted shopping habits”. That suggests the growth could be slowing, as it has done for other retailers in April in particular.
The company has revealed in Wednesday’s update that secured an additional $260 million in short-term debt facilities to increase liquidity. It says it expects to not need to draw on the funding, but said it “considered it prudent” to have them standing by regardless.
Sales at the business’s 14 Kiwi stores was down 3.3% for the quarter due to New Zealand’s shutdown, though the company noted the segment contributes only 3% of annual sales.
A total of 10 JB Hi-Fi Australia stores have also been shut, primarily in airport and CBD locations where foot traffic has declined. But online sales have “significantly accelerated”, the company said.
“Both JB HI-FI and The Good Guys will continue to monitor and evolve their store, commercial and online offerings in line with changes to customer shopping habits,” the company told the ASX.
The big concern for retailers like JB Hi-Fi is the impact of the sales slowdown later in the year with many of these purchases being pull forward commitments by consumers, or one-offs. There could be some dry months ahead unless there is a lot of extra stimulus provided to the economy.
