JB Hi-Fi reports sales up, profits down amid changing conditions

The JB Hi-Fi Group, which includes JB Hi-Fi Australia, JB Hi-Fi New Zealand, and The Good Guys, reported a 4.3 per cent revenue increase in FY23 to $ 9.63 billion vs $ 9.23 billion in FY22. EBIT, however, saw a decline of 3.2 per cent vs the previous year to $ 769 million, while net profit after tax (NPAT) fell 3.7 per cent to $ 524.6 million.

The sales results show promise against less favourable figures for the retail industry. The Australian Bureau of Statistics (ABS) reports an 0.8 per cent contraction of seasonally adjusted retail sales for the June 2023 quarter compared to the previous quarter.

Group CEO Terry Smart said, “We are pleased to report record sales and earnings per share for FY23. In a challenging retail environment, we remained top of mind for shoppers and grew our market share by continuing to drive our value offering, leveraging the strength of our multichannel offer and maintaining our high levels of customer service.”

The JB Hi-Fi Group revealed its growth categories for the financial year were Communications, Audio, Accessories, Games Hardware, and Services.

Notably, online sales for JB Hi-Fi Australia declined by 20.9 per cent to $940 million or 14.4 per cent of total sales. This result indicates a significant shift in online and in-store consumer buying habits, as the FY22 results reported online sales expanding by 52.3 per cent over the previous financial year, representing 19.2 per cent of sales. JB Hi-Fi New Zealand and The Good Guys show similar trends.

The drop in online sales also reflects a broader deceleration of ecommerce. The July 2023 Australia Post Quarterly eCommerce update reports that online spending is down 3.1 per cent YoY in 2023, with smaller average basket sizes. Signs point to a general reduction in consumer spending, with more strategic buying behaviours taking place. For example, the report also shows that online sales experienced a 7.3 per cent uplift during EOFY sales events compared to the two weeks prior, suggesting shoppers are taking advantage of discount opportunities where they can.

Though the Group did not provide firm guidance for FY24, it included a sales update for July that revealed varied results. Sales growth for JB Hi-Fi Australia was -1.8 per cent, with New Zealand showing a more positive 10 per cent figure, while The Good Guys trailed at -12 per cent.

Smart said the JB Hi-Fi Group will “adapt and respond to the changing retail conditions to ensure we remain the number one destination for shoppers and grow our market share.”

While the Group has shown signs of resilience, Smart’s statement suggests expectations of a softening retail environment with more challenges to come.