By Claire Reilly
JB Hi-Fi has released its half-yearly results for the six months ended 31 December 2012, reporting a 3.1 per cent increase year-on-year in sales at JB-branded stores, up to $1.71 billion, and a 3.0 per cent increase in net profits after tax (NPAT) up to $82.1 million.
Despite the boost in total store sales, comparable store sales were down 3.5 per cent, largely due to the weakness of JB’s Visual category, ostensibly in panel televisions. Excluding this category, comparable store sales were down 0.6 percent. Across the company, cost of doing business increased 25 basis points to 13.8 per cent.
JB Hi-Fi CEO Terry Smart discussed the company’s performance in the results release, including the strengths of the retailer’s store network, and its newer business offerings – including the recently launched JB Hi-Fi Home appliance store trial.
“We are pleased with the result, with total sales growing and the improved gross margin resulting in NPAT growth over the prior period,” said Smart.
“Encouragingly, our comparative stores are seeing an improved trend in customer transactions with positive growth on the prior period. The ability to leverage our high traffic locations, low cost of doing business, low prices across the full range of categories and continued focus online, will ensure ongoing maximisation of sales and earnings growth opportunities.
“Our new store rollout continues to generate solid return on capital with most of these stores located in shopping districts where JB Hi-Fi does not currently have a presence and thus having minimal impact on our existing store network.
“Our trial of JB HI-FI HOME, whilst at an early stage, has exceeded internal expectations and is seeing positive customer engagement with good growth in appliances and no adverse effect on the traditional JB Hi-Fi product categories.”
The company’s online offering also had a boost in the first half of the 2013 financial year, with online sales increasing 40.3 per cent on the prior corresponding period, up to $37.2 million. Online now accounts for 2.0 per cent of JB Hi-Fi’s overall sales.
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Looking ahead, Smart was positive about the next six months, although he conceded it would be difficult to replicate the kind of sales growth seen in the second half of the 2012 financial year, which was driven by industry-wide discounting.
“We have seen a positive start to the New Year with total sales growth in January of 11.7 per cent and comparative store sales growth of 4.2 per cent,” he said. “January gross margin has improved on last year as we cycle the significant market-wide promotional period from last year.
“In the second half of FY12, we saw aggressive discounting across the market which, while driving sales, did impact gross margin. As we cycle this period we anticipate sales growth may be more challenging, but this should be offset by a relatively stable gross margin environment.
“We continue to remain passionate about providing the best value across our entire range and this, combined with a high level of customer service, will enable us to continue to grow our market share," he added. "As always, we owe a great deal of our success to the passionate and knowledgeable staff across both our stores and support office.”
Read more: Winners and Losers: Which categories are the biggest at JB Hi-Fi?