JB Hi-Fi Limited Reported Sales Update And FY 2019 Guidance

  • Oct 25, 2018 AEDT
  • Team Kalkine
JB Hi-Fi Limited Reported Sales Update And FY 2019 Guidance

On October 25, 2018, JB Hi-Fi Limited (ASX: JBH) came forward and announced the quarterly results for the three months ended September 30, 2018. The company stated that, in September 2018 quarter, it’s total growth in the sales, with respect to the JB Hi-Fi Australia, was 5.3% representing a decline as compared to the prior corresponding period. For JB Hi-Fi New Zealand, total sales witnessed an increase of 4.0% on the YoY basis. However, in the same period, The Good Guys recorded the YoY sales growth of 2.3%.

JB Hi-Fi Limited, on October 25, 2018, gave the sales guidance for FY 2019. The company has reaffirmed the earlier FY 2019 sales guidance of approximately $7.1 billion. Of this, the company expects that it would be generating $4.75 billion from JB Hi-Fi Australia and $0.22 billion from JB Hi-Fi New Zealand. Moreover, the company expects to garner $2.15 billion from The Good Guys in FY 2019. 

The chief executive officer or CEO of JB Hi-Fi Limited stated they would be reviewing the existing store portfolio as well as they would also be very picky when it comes to store selection as they are mainly focused on those areas which would result in increased foot falls as well as which would be easy for the customers to approach. The chief executive stated that the company has been referencing that its lower business costs are the primary competitive advantage. This has also helped the company in maintaining its pricing strategies. The company’s management reflected favorable views for the FY 2018 results. The company managed to garner sales amounting to $6.9 billion which reflects the YoY growth of 21.8%. However, its EBIT stood at $350.6 million implying 14.5% YoY growth.

JB Hi-Fi Australia generated a gross profit of $1 billion which implies the YoY growth of 9.1%. Its cost of doing business or CODB stood at 14.8% implying a YoY fall of 14 bps (basis points). The total operating costs were as per the expectations and the management was able to maintain a disciplined approach. The earnings growth of JB Hi-Fi Australia was well-supported by the robust momentum in the sales as well as operating cost leverage.

JB Hi-Fi New Zealand saw total sales amounting to NZD231.5 million which implies the decline of 1.1% YoY. However, moving forward, the company would be working to improve the performance of its New Zealand business. The management also stated that the positive momentum was also witnessed in the company’s balance sheet primarily because of the lower operating as well as financial leverage.

The company’s management stated that it would be working to be the preferred option of the customers would be able to outpace the competition moving forward. The company believes that the five primary parameters which would help the company in outpacing the competition are significant scale, lower cost operating model, multichannel capabilities, significant supplier partnerships as well as quality store locations.

The stock price of JB Hi-Fi Limited ended the session at A$22.880 per share which implies an intraday fall of A$0.690 or 2.927%. The company’s share price is hovering in the lower range.


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