• Total Sales (JB Hi-Fi Australia): Increased by 7.2% to $3.88 billion.
• Comparable Sales (JB Hi-Fi Australia): Up 7.2%.
• Online Sales (JB Hi-Fi Australia): Increased by 16.4% to $682.7 million, 17.6% of total sales.
• Gross Profit (JB Hi-Fi Australia): Increased 6.4% to $846.4 million.
• Gross Profit Margin (JB Hi-Fi Australia): Down 17 basis points to 21.8%.
• EBIT (JB Hi-Fi Australia): Increased 7.5% to $316.5 million.
• Total Sales (JB Hi-Fi New Zealand): Increased by 20% to NZD202.5 million.
• Comparable Sales (JB Hi-Fi New Zealand): Up 6.9%.
• Online Sales (JB Hi-Fi New Zealand): Increased by 58.4% to NZD32.4 million, 16% of total sales.
• Gross Profit (JB Hi-Fi New Zealand): Increased by 22.4% to NZD34.5 million.
• Gross Margin (JB Hi-Fi New Zealand): Up 33 basis points to 17%.
• Total Sales (The Good Guys): Increased by 9.2% to $1.52 billion.
• Comparable Sales (The Good Guys): Up 8.8%.
• Online Sales (The Good Guys): Increased by 8.9% to $233.3 million, 15.4% of total sales.
• Gross Profit (The Good Guys): Increased by 8% to $351.1 million.
• EBIT (The Good Guys): Increased by 7.5% to $99.5 million.
• Total Sales (e&s): Increased by 7.6% to $92.3 million since acquisition.
• Inventory: $1.32 billion, up 13.5% year on year.
• Net Cash: $555 million.
• Interim Dividend: $1.70 per share, fully franked, up 7.6%.

• Warning! GuruFocus has detected 3 Warning Signs with FRA:B2S.

Release Date: February 09, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• JB Hi Fi Ltd (JBHIF) reported a strong sales increase of 7.2% in Australia, driven by demand for technology and consumer electronics.
• The company saw significant growth in online sales, with a 16.4% increase in Australia and a 58.4% increase in New Zealand.
• The acquisition of e&s has expanded JB Hi Fi Ltd (JBHIF)'s access to premium home appliance categories, enhancing its product range.
• The Good Guys division experienced a 9.2% increase in total sales, with strong performance in floorcare and portable appliances.
• JB Hi Fi Ltd (JBHIF) maintains a strong balance sheet with a net cash position of $555 million, providing financial flexibility.

Negative Points

• Gross profit margins have slightly decreased due to competitive pressures and sales mix changes.
• The company faces ongoing heightened competitor activity, impacting pricing strategies and margins.
• There is uncertainty in the retail market, which could affect future sales performance.
• The New Zealand division, despite sales growth, is not expected to be profitable for the full year.
• The company is cautious about promotional activities due to the competitive landscape, which may affect profitability.

Q & A Highlights

Q: Can you discuss the increased competitive intensity and its impact on promotions? A: Terry Smart, Group CEO: The competitive activity is more maintained rather than increased. It affects our gross margin slightly, as seen in both brands. This is due to investments on the floor by staff to close deals, especially in competitive categories like computers.

Q: How might potential interest rate cuts impact the business? A: Terry Smart, Group CEO: Rate cuts could be positive for retail in general. Improved consumer sentiment would likely benefit us.

Q: Is there a shift in focus towards driving value, and are you willing to sacrifice gross margin for sales momentum? A: Terry Smart, Group CEO: Driving value has always been a priority. We focus on top-line growth by ensuring competitive pricing. The emphasis on value is due to increased competitive activity, not a change in strategy.

Q: How is the company handling the impact of the weaker Australian dollar on costs? A: Terry Smart, Group CEO: Suppliers are discussing potential price rises, especially in home appliances. However, since we buy locally like our competitors, any price increase would affect the entire market.

Q: What is the outlook for the robot vacuum category, given its low household penetration? A: Terry Smart, Group CEO: Robot vacuums fit well into our tech space and are performing well. We are merchandising them prominently to capture growth as household penetration increases.

Q: What are the plans for e&s expansion across the country? A: Nick Wells, COO: We are focusing on integrating systems and processes before expanding interstate. A few stores will open in Victoria, but broader expansion plans are not yet solidified.

Q: How is the company managing costs to maintain margins? A: Nick Wells, COO: We manage costs in line with sales, ensuring good customer service. We maintain a gross margin around 22%, adjusting for mix and other factors.

Q: How important is innovation in maintaining sales growth, especially with AI products? A: Terry Smart, Group CEO: Innovation is crucial, with AI-enabled devices offering future-proofing benefits. While AI isn't adding significant value today, it will drive future growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.