Finance Finance News JB Hi-Fi cuts through coronavirus noise to deliver sound result

JB Hi-Fi cuts through coronavirus noise to deliver sound result

JB Hi-Fi profit results
JB Hi-Fi has boomed on the back of the perception of it being good value for money. Photo: The New Daily
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Consumer electronics giant JB Hi-Fi has posted double-digit sales growth in the third quarter of the financial year, despite the coronavirus shutdown.

While many retailers have been hit hard as social distancing regulations grip the nation, JB Hi-Fi emerged as a shining light among beneficiaries of pre-pandemic panic buying.

Its third-quarter sales lifted 11.6 per cent on the same period in 2019, while year its year-to-date sales were up 6.9 per cent.

The retailer’s results came as Australian Bureau of Statistics data showed retail turnover spiked 8.5 per cent in March – even higher than the “unprecedented” 8.3 per cent suggested by preliminary data released in late April,

JB-owned The Good Guys also enjoyed significant sales growth, with third-quarter sales up 13.9 per cent on the previous year and year-to-date numbers showing a 5.4 per cent lift.

A sign inside a JB Hi Fi store.
Signs in a JB Hi Fi store in Melbourne. Photo: The New Daily

The company attributed much of its recent success to “an acceleration of sales in late March” as customers began preparing for stricter coronavirus restrictions.

“The group has seen strong sales growth in Australia continue into April and early May as JB Hi-Fi and The Good Guys continue to provide customers with home appliances,” it said in a statement to investors.

But not every store has benefitted from the current environment – three shops in airports and seven in city centres across Australia have been temporarily closed.

The company’s New Zealand stores have also suffered under stricter coronavirus rules, contributing to a 3.3 per cent fall in third-quarter sales.

Future remains uncertain

JB Hi-Fi chief executive Richard Murray thanked the company’s 12,000 staff for the business’ strong performance through the crisis.

But he warned the future would still present challenges, and cautioned investors there was too much uncertainty to give profit guidance for the current financial year.

“Our customers have turned to us for their technology and home appliance needs as they adapt to these unique circumstances,” Mr Murray said.

“While the outlook for the remainder of the financial year is uncertain, we continue to be in a strong financial and operational position.”

Retail turnover sees coronavirus spike

March’s retail sales spike reflects a significant lift in food and household goods retailing – including sports equipment.

“However, the impact of social distancing regulations saw sales fall in cafes, restaurants and takeaway food services, and discretionary spending in clothing footwear,” ABS director of quarterly economy-wide surveys Ben James said.

“Personal accessory retailing, and department stores, was also weak. The March month saw both the strongest rise in food retailing, and the strongest fall in cafes, restaurants and takeaway food services, that we have seen in the history of the series.”

Food retailing (such as corner shops and supermarkets) lifted 24.1 per cent while turnover in takeaway, cafes, and restaurants fell 22.9 per cent.

There were similar turnover declines for clothing, shoe and accessory retailers, which were down 22.6 per cent over the month. Department stores were down 8.9 per cent.