Shares in electronics retailer JB Hi-Fi have plunged in early trade amid disappointment at its latest trading update.
The retailer posted a strong full year net profit result on Monday, up 10 per cent to $128.4 million for 2013/14.
But it warned it has started the new financial year on the backfoot, with same store sales in July down 5.5 per cent due to a slide in sales of tablet computers.
JB Hi-Fi warned it was a trend that was expected to continue for the remainder of the first half.
Its shares slumped more than eight per cent in early trade and were $1.43 weaker at $17.94 at 1030 AEST.
“It appears the market has focused in on JB’s like-for-like sales, which are down 5.5 per cent,” CMC chief market strategist Michael McCarthy said.
“I suspect it’s a bit of an over-reaction to one month’s figures and we could see it bounce over the trading day.”
JB Hi-Fi lifted its full year profit on the back of growing sales and improved profit margins in 2013/14.
Total sales rose five per cent to $3.48 billion.
Chief executive Richard Murray said that while first half sales this financial year would be hit by fewer tablet sales, there was a strong pipeline of new products and solid annual sales were still expected.
He said, the continued rollout of JB Hi-Fi HOME stores and the expansion of its commercial division would help drive sales and earnings growth.
“These opportunities, combined with the maturation of the 21 stores opened in the last two years and an exciting new product outlook, will drive sales and earnings growth,” he said.
JB Hi-Fi announced a fully-franked final dividend of 29 cents per share, which takes its full year dividend to 84 cents per share, up from 72 cents a year ago.
It also announced plans to buy back up to 645,765 ordinary shares at a cost of about $12.5 million.
The share buyback will begin between September and December.