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JB Hi-Fi Defies Retail Slump with Strong HY20 Growth
JB Hi-Fi Limited has challenged the retail decline rhetoric with its strong HY20 results. In its announcement, the leading tech and consumer electronics companies saw a sales jump of 3.9 percent with ‘positive comparable sales growth across all three divisions’.
The Proof is in the Pudding
In Australia, JB Hi-Fi sales rose 5.1 percent to $2.72 billion, with a Gross Profit (GP) increase of 4.8 percent; New Zealand saw sales rise 0.8 percent but experienced a 0.1 percent loss in GP. Furthermore, online sales grew 18.3 percent to $170.8 million – this accounts for 6.3 percent of total sales. The company ais to ‘continue to invest in and evolve [its] online offer’.
“We are pleased to report record sales and earnings in the first half, with JB HI-FI Australia and The Good Guys recording strong earnings growth. I would like to thank the over 12,000 team members across Australia, and New Zealand whose hard work and continued focus on our customers delivered this result,” said Richard Murray, CEO of JB Hi-Fi Limited.
JB Hi-Fi Limited acquired the Good Guys in September 2016 for $870 million. In the HY20 results, The Good Guys experienced a sales growth of 1.5 percent to $1.15 billion, with comparable sales up 0.6 percent. For online retail, The Good Guys saw an increase of 12.6 percent to $79.6 million. This accounts for 6.9 percent of total sales.
“We are pleased to deliver positive sales and strong earnings growth in the first half of FY20, with sales improving throughout the half and culminating in a strong Christmas quarter. In a competitive environment, we remained focused on growing sales and market share in a sustainable manner whilst continuing to evolve the business,” said Murray.
JB HI-Fi has not been shy with its opinion on the state of the retail economy. In August 2019, arguably one of the rougher parts of the calendar year for retail, David Jones claimed that retail was ‘in recession’, due to falling sales within Woolworths Limited. “The retail sector in Australia is currently in recession, and the Australian economy has slowed to its weakest level since the global financial crisis in 2009,” the company shared in August.
JB Hi-Fi refuted these statements, blaming the shortcomings on the failure of keeping up with changing customer habits, not the failing economy. “Bunnings seems to make it work, but the department stores are struggling,” Murray said in August. “Kmart makes it work because they understand their customer and have their proposition right. It’s no secret that department stores are struggling for relevance at the moment in consumers’ minds.”
In the coming months, to ensure profitability and growth, JB Hi-Fi Limited is committed to a series of critical areas, including:
- Ethical Sourcing
The company aims to work with its’ supply partners to improve working conditions in [its] supply chain and ensure what [it uses] and sell is sourced ethically.
- Product Waste and Recycling
JB Hi-Fi Group plans to minimise ‘the waste [the company] creates and encouraging responsible recycling’
- Social Impact
JB Hi-Fi Limited is committed to ‘supporting social causes that are important to [its] staff, particularly through [its] workplace giving programs
“We are pleased with our performance in the important first half of FY20. We are clear on our objectives for the next six months and are excited by the outlook for the business,” Murray said.
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