JB Hi-Fi posts record December-half sales, earnings but outlook split

discretionary retailers to reveal its December half performance this past week when it showed record sales and earnings.– the name behind Supercheap Auto, Rebel Sport, BEC and Macpac – which also showed a bumper half year, with its boss saying shoppers still “want to live a little” after years of COVID-19 disruptions.

JB Hi-Fi’s sales gained 8.6 per cent to $5.3 billion in the six months to December 31, topping analysts’ expectations. Online sales in the December half reached $752.1 million, about 14.2 per cent of total sales.Continued sales growth, combined with improved gross margins, resulted in strong earnings before interest and tax gain of 14 per cent to $479.2 million. Net profit after tax for the December half is tipped to be up 14.6 per cent to $329.9 million.

“We think the rising cost of living, the withdrawal of government stimulus and falling asset prices are likely to subdue demand in JBH’s key categories,” he said. Australian economic data so far this year has been mixed, with weak housing figures, still poor consumer confidence and some signs of a slowing in the jobs market, but strong retail sales and high inflation, which hasAMP chief economist Shane Oliver believes the RBA has done enough to bring inflation back to target and that it should and will pause in February to avoid the risk of unnecessarily tipping the economy into recession.

MST Marquee senior analyst Craig Woolford believes price inflation has played a role in driving up sales and earnings. He also believes that the market remains too bearish on the near-term for retail, and expects sales and earnings to decline in fiscal 2024 across the discretionary sector. Mr Cousins said the investment thesis for JB Hi-Fi has historically been driven by store rollout and online growth, as well as category growth driven by new tech. More recently turning around The Good Guys has also been a driver. He said while JB Hi-Fi is continuing to perform well there are few near-term growth catalysts.

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