“We are pleased with our performance in the important first half of 2019. We are clear on our objectives for the next six months and are excited by the outlook for the business,” Mr Murray said in the statement to the Australian stock exchange.
Comp growth slows
Earnings before interest and at JB Hi-Fi Australia rose 4.5 per cent to $191.9 million, with EBIT margins flat at 7.4 per cent as total sales rose 4.7 per cent to $2.59 billion, same-store sales by 3 per cent an online sales by 21 per cent to $144.4 million.
Same-store sales growth slowed to 2.8 per cent in the December quarter from 3.4 per cent in the first quarter as the chain cycled strong 7.8 per cent comps in the year-ago period. Comps slowed again in January, to 1.5 per cent, compared with 4.8 per cent in January 2018.
Solid demand for communications, games hardware, audio, fitness and connected technology offset weaker sales of software including movies and music.
Gross margins in Australia rose 11 basis points to 22.1 per cent, reflecting a shift to higher margin products, but cost of doing business rose 20 basis points to 13.96 per cent, due to higher sales, marketing and occupancy costs.
NZ in the black
JB Hi-Fi New Zealand returned to profit, earning $NZ1.1 million after just breaking even in the year-ago period, as total sales rose 5.8 per cent to $NZ131.8 million, same-store sales by 12.6 per cent and online sales by 65.4 per cent after the launch of a new online platform in August 2017.
“We are encouraged by the improved performance in New Zealand, particularly the strong comparable sales growth which is evidence that our offer is resonating with customers,” Mr Murray said.
“We continue to reposition the business, which has included the closure of a loss making store in July, and in October the appointment of a local managing director, Cherie Kerrison.”
At The Good Guys, EBIT rose 3.9 per cent to $43.7 million as sales rose 2.8 per cent to $1.13 billion, buoyed by two new stores and demand for fridges, washing machines, TVs and computers.
The Good Guys’ online sales fell 2.4 per cent due to weaker sales on third party marketplaces.
However, same-store sales growth accelerated to 1.9 per cent in the second quarter from 1 per cent in the September quarter, taking comps for the half-year up 1.5 per cent, while same-store sales in January rose 0.3 per cent after falling 4.7 per cent in January 2018.
JB Hi-Fi lifted its interim dividend by 5¢ to 91¢ a share, payable on March 8.
Analysts believe JB Hi-Fi is faring better than rival Harvey Norman as falling house prices, rising household living costs and lacklustre consumer sentiment dent demand for big ticket purchases such as televisions and large appliances.
JB Hi-Fi shares have fallen 14 per cent since the full-year results in August but at $22.48 are trading above last month’s low of $20.42.