By Chris Nicholls
MELBOURNE: JB Hi-Fi has revealed “solid” trading for the past three months, going against the general downward trend in retail sales, and expecting sales to be ‘towards the top end” of their initial forecast.
The predictions were given by JB Hi-Fi chief finance officer, Richard Murray, at a presentation at the Macquarie Emerging Leaders conference in Sydney.
While no specifics were given, Uechtritz said the year-end results would be “a strong result, considering continued investment in telecommunications and our New Zealand expansion.
“These results highlight the resilience of our retail model and the momentum we enjoy from the focus on home entertainment, a unique retail concept and the store rollout strategy,” he said.
JB Hi-Fi originally predicted FY08 sales to reach approximately $1.8 billion (up 40 per cent on FY07), with net profit after tax (NPAT) of between $57-60 million (up 41-49 per cent on FY07).
Uechtritz also said he expected computers, games and telecommunications to “continue to drive comparable store sales growth”, and that the upcoming Beijing Olympics would help continued flat panel growth.
In a sign of the intense competition at this time, though, JB Hi-Fi did admit gross margins had dropped, but said cost of doing business fell more than enough to compensate, with a 70 basis point drop to 14,3 per cent for HY 08. Gross margin fell by 50 basis points.
JB Hi-Fi also boasted its cost of doing business was considerably less than its listed competitors, at 14.3 per cent of turnover, compared with 21.8 per cent for Woolworths and 20.2 per cent for Clive Peeters.