JB Hi-Fi reports record profits, sales in FY19

JB Hi-Fi has seen record profit and sales for the 2019 financial year, leveraging strong communications, fitness and games hardware sales to deliver growth across all channels of the business.

Net profit for the year grew 7.1 per cent to $249.8 million, compared to the $233.2 million seen last year, while total group sales grew 3.5 per cent to $7.1 billion – up from $6.9 billion in FY18. 

JB Hi-Fi Group chief executive Richard Murray said the group was pleased with the result, and that the success of the JB Hi-Fi brand during a difficult second half in Australia proves it has the right business model.

“It was a solid result for JB Hi-Fi Australia, and a particularly pleasing finish for FY19 with strong sales in the key tax time promotional period,” Murray said.

Comparable sales grew 2.8 per cent, while total sales grew 4.1 per cent to $4.73 billion – driven by communications, audio, fitness, games hardware and connected technology.

However, the company’s media segment underperformed. Sales in the category fell 7.3 per cent compared to FY18, with a double-digit decrease in movies and music sales offset by strong growth in the gaming software segment.

Murray noted during an investor call that while store roll-outs had slowed, physical locations remain key to its growth, even as it expands the online channel, which grew 23 per cent in FY19 and now makes up 5.5 per cent of total sales.

The New Zealand business also saw strong growth online, with 38.3 per cent growth in online sales to NZ$13.3 million, or 5.6 per cent of total sales. Comparable sales grew 8.2 per cent, while total sales grew 2 per cent to NZ$236.2 million.

According to Murray, this result is evidence that JB Hi-Fi’s offer is resonating with New Zealand customers, and proves that hiring New Zealand managing director Cherie Kerrison to lead the international business was the right call.

As for the recently acquired The Good Guys brand, total sales grew 2.2 per cent to $2.15 billion, with comparable sales up 0.9 per cent, while online sales grew 3.7 per cent to $130.9 million. 

“In a competitive environment, we remained focused on sales and market share whilst stabilising gross margins and continuing to evolve the business,” Murray said.

JB Hi-Fi Group will continue to invest in The Good Guys brand, while seeking to maintain and enhance it, said Murray.

One such initiative will be to take learnings from JB Hi-Fi’s telecommunications category and use it to launch a similar offering in The Good Guys.

Looking to the next 12 months, the retail group expects total sales for FY20 to reach $7.25 billion – with JB Hi-Fi Australia to contribute $4.84 billion, JB Hi-Fi New Zealand NZ$240 million, and The Good Guys $2.18 billion.

Murray notes that while the business continues to see variability in the overall retail channel, JB Hi-Fi enters the new financial year confident in its ability to execute and grow market share.

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