Stability now as JB Hi-Fi sales rise as profits fall

By Claire Reilly

JB Hi-Fi released its half-yearly results today for the six months ended 31 December 2011, reporting a 5.5 per cent increase in revenues (including Clive Anthonys branded stores), up to $1.8 billion. However, the company also reported a 9.4 drop in profits after tax, down to $79.6 million, indicating its cost of doing business (CODB) increased over the six month period.

Discussing the results was JB Hi-Fi CEO, Terry Smart.

“We saw a total sales growth for the company, with JB Hi-Fi branded stores growing 6.7 per cent, and market share gains in what has been a very challenging retail environment,” said Smart.

“We continue to evolve our model both in store and out of store, while maintaining our focus on those basic fundamentals which have and will continue to make us successful, being our unique brand personality, low cost of doing business and motivated and passionate staff.”

The company had 165 stores across Australia and New Zealand at 31 December 2011, with plans to open roughly 13 to 15 new stores a year, to reach a goal of 214 JB Hi-Fi branded stores.

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In addition to its bricks and mortar offering, JB Hi-Fi has added new online elements to its business, including a direct import camera microsite and the new JB NOW music streaming service.

“Our online strategy, which has been evolving over the last 6 years, continues to deliver solid growth,” added Smart. “The first stage of our digital strategy, our music subscription streaming service, JB Hi-Fi NOW, is gaining momentum and will accelerate in growth once we launch our mobile application in the next four weeks.

“While it has been a tough start to the year we expect sales to improve as we cycle out the heavy promotional period of post Christmas and New Year sales. In our view consumers were suffering from ‘promotional fatigue’ and therefore have not reacted as well to our post Christmas promotional offers as in previous years.

“While the market will remain challenging, we will continue to focus on delivering customers a unique and engaging shopping experience both in store and online.

“Our continued focus on customer service through our passionate and knowledgeable staff, combined with our low cost operating model, will mean we can continue to offer best value and capture market share as the industry further consolidates.”

Looking forward to the second half of the 2012 financial year, JB Hi-Fi anticipated a 5 per cent increase in sales compared to the previous year, up to $3.1 billion.

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