JB Hi-Fi was a major beneficiary of the work-from-home trend during COVID-19, with online purchases soaring 63 per cent to $1.1 billion – or 22.7 per cent of the company’s total sales – in the six months to December 2021. That fell to $752.1 million, or 14.2 per cent of total sales, in the latest half, despite data from the ABS showing total online sales across the nation’s retailers more broadly grew 26 per cent in November, driven by the increasing popularity of the Black Friday promotions.
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JB Hi-Fi said continued strong demand for consumer electronics and home appliances and well-executed Black Friday and Boxing Day promotional periods were the main drivers of its sales growth.
Mees said the company’s earnings showed that consumer spending remained strong, but that results would likely soften in the next half.
“The earnings results show that consumers are still out there and spending on electronics and home appliances, and that pressure on consumer finances, including inflation and higher mortgage rates, hasn’t filtered through to pulling back spending,” he said. “But it’ll be much more difficult in the second half as people on fixed rate mortgages move onto higher rates.”
Comparable sales growth is likely negative in the second half, Mees said, because of strong second-half results last year. While sales growth in the first half of 2022 was negative 2.5 per cent, it climbed to 9.3 per cent, raising the benchmark that the company must meet to deliver a positive comparable result in the second half this year.
But Mees said the longer-term outlook for JB Hi-Fi was positive. “2024 will be a tough year given ongoing pressure on household finances and unemployment, but the company will continue outperforming the category and the broader market,” he said. “They’ve got a flexible business model, discipline around promotions and discounting, and give everyone else a masterclass on managing cost effectively.”
The group will release its half-year audited statutory results on February 13.
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