JB Hi-Fi has recorded significantly lower sales on the prior corresponding period (pcp) in the first weeks of FY18 trading, outlining an expectation that the market will remain competitive heading into the Christmas trading period.
In a trading update delivered at its Annual General Meeting on Thursday, JB Hi-Fi advised that year-to-date sales growth to October 22 was 6.2 per cent, down from 14.3 per cent in the pcp.
Comparable sales growth for JB Hi-Fi was 3.2 per cent, down from 10 per cent in the pcp and well below a Citi forecast of 5.5 per cent, while The Good Guys booked 3.1 per cent total sales growth and 2.4 per cent comparable sales growth, down on Citi’s 5 per cent forecast.
Sales moderated in September and October due to changes in the timing of “key product releases” from last year, which the company said had elevated sales growth in the pcp.
“[We] expect the market to remain competitive as retailers drive for market share in the lead up to the key Christmas period,” the company said on Thursday.
Citi analyst Bryan Raymond said the result likely indicated that the iPhone 8 launch has failed to deliver sales growth because customers are waiting for the upcoming launch of the iPhone X.
“In JB Hi-Fi and The Good Guys, we believe we have two unique and relevant brands, particularly in the eyes of our customers…we are confident we will maintain our market leading competitive position.”
JB Hi-Fi Group CEO Richard Murray told investors at the AGM that since Terry Smart had been appointed as managing director of The Good Guys in April a variety of positive changes had been made to the business.
This has reflected in TGG’s year-to-date trading, which is well up on the 1.3 per cent decline in comparable sales that JB Group booked for the business between November 2016 and June 2017.
However, Raymond said he was surprised that TGG did not perform better given the soft-period it was cycling from initial FY17 trading.
“We are surprised at the magnitude of the slowdown for The Good Guys given the same period last year was very soft for The Good Guys post-corporatisation of the JVP stores and the uncertainty surrounding the acquisition, which was announced on 13 September 2016,” he wrote in a note on Thursday.
In New Zealand, total sales were down o.3 per cent to NZD234.0 million with comparable sales down 8.8 per cent. Murray said management were pleased with the performance of the newly launched Kiwi website. JB Hi-Fi has completed a review of its NZ business and developed a two year strategy to improve performance.
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