A strong Christmas boosts JB Hi-Fi’s sales and profits

JB Hi-Fi has today issued a trading update on its performance over the past six months, foreshadowing a strong financial performance and positive sales and profits growth.

Although the results are still subject to a final auditor’s review, JB Hi-Fi is set to post a 6.8 per cent sales increase for the six months ended 31 December 2013, up to $1.94 billion from $1.82 billion in the prior corresponding period.

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Comparable sales growth also climbed 2.8 per cent year on year, while earnings before interest and tax (EBIT) climbed 7.5 per cent from $123.7 million in 1H13 to $132.9 million in 1H14. With cost of doing business staying relatively steady at 13.9 per cent (2H13: 13.8 per cent) net profit after tax increased 10.0 per cent to $90.3 million, up from $82.1 million year-on-year.

In the trading update today, the company announced:

January 2014 sales to date have maintained a positive comparable sales trend from the first half , at circa 2.0 per cent for the month. The company maintains its full year sales guidance of growth in total sales of between 6 per cent and 8 per cent.

Today’s announcement to the industry is in line with previous reporting from financial analyst group Citi, which showed that JB Hi-Fi performed well in the lead up to Christmas 2013. Analysts at Citi estimated that JB was the best performing retailer in terms of pre-Christmas sales, with sales at the company up 3.8 per cent for the October-December quarter, compared with 3.1 per cent growth for Harvey Norman and 2.1 per cent for David Jones.

“Our industry feedback suggests JB Hi-Fi was the most popular retailer this Christmas,” said Citi senior retail analyst Craig Woolford. “We expect the strongest performing category over Christmas was computer tablets. The drop in price points and expansion of choice made tablets popular gifts again in 2013. JB Hi-Fi is very well placed in the tablet category, much more so than Harvey Norman.”

JB Hi-Fi will release its full results for the six months ended 31 December 2013 next Monday 3 February 2014.

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