electronic shop front
Total group sales increased by 23.7 per cent. Image: JB Hi-Fi, Ennex Perth
  • 86.2 per cent increase on net profits
  • Total sales up to $4.94 billion
  • Online represents 11.3 per cent of total sales excluding Victoria lockdown

While a side-effect of Covid-19 has been an increase in online retail at the possible expense of bricks and mortar stores, one very notable outlier ecxists: JB Hi-Fi (ASX: JBH).

The demand for consumer electronics and home appliances has seen the predominately offline retailer’s sales surge, resulting in an 86.2 per cent increase in net profit after tax in HY21 compared to HY20.

Total sales for the group – which includes The Good Guys – increased by 23.7 per cent to $4.94 billion compared to the same half-year results for the 2020 financial year.

During the presentation of the results, the group referred to “great operational achievements” such as the successful execution of Black Friday and Christmas promotions, efficient supply chain handling despite the pandemic and the fact the company didn’t receive any government subsidies.

Additionally, the group said that all landlords were paid on time and they continued to pay team members wages even when certain stores were required to close.

While JB Hi-Fi’s online sales grew 201.9 per cent to $516.6 million, this represented 11.3 per cent of total sales, although this excludes the period when all Victorian stores were closed due to the lockdown.

Where The Good Guys had struggled previously, sales increased by 26.4 per cent to $1.45 billion for HY21 facilitating a gross profit increase of 36.6 per cent of $324.6 million.

Traditionally, JB Hi-Fi stores have been located in major shopping centre, CBDs, airports and other high foot traffic areas as a convenience retailer. Focus areas for JB Hi-Fi this financial year include trialling alternate store formats as a way of increasing market penetration, especially out of the common ‘young tech savy’ stereotype associated with their brand.

Richard Murray, CEO of JB Hi-Fi, said he was pleased with the strong sales momentum and thanked his fellow team members.

“I would like again to recognise and thank our team members across Australia and New Zealand who have delivered another record result,” Mr Murray remarked.

“In what is an uncertain environment we continue to adapt and respond and, with a number of opportunities ahead of us, we remain excited by the outlook of the business.”

The Good Guys focuses on the sale of home applicancies and achieves this by targeting what it describes as ‘home-making’ families and Gen X demographics. Their stores are primarily in easily accessible locations in homemaker centres or as standalone stores.  A focus for this financial year includes upgrading stores to focus on ‘adjacencies’. This refers to store layouts that encourage purchase decisions made while in the store itself.

The interim dividend increased to 180 cents per share – an 81.8 per cent increase, representing a dividend yield of 7.4 per cent according to Broker Citi.

After the report was released JB Hi-Fi shares rose 3 per cent although at time of publication, 1:45pm AEDT, shares are down 0.91 per cent to $51.96.

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