Business Description:
JB Hi-Fi Limited (JBH) is a specialty discount retailer of branded home entertainment products. The Group's products fall into consumer electronics, car sound systems, and music and DVDs and white goods. JBH does not operate a warehouse; instead all stock is delivered directly to each store and largely stored on the shop floor.

Strategy Analysis:
Growth is driven by a store rollout program which adds around 13-15 sites per year with a long term goal of 214 national stores. The product mix is constantly revised to ensure competitiveness. JBH´s reluctance to take on the new devices illustrates strict product selection. Margin gains derive from scale benefits which reduce the cost of doing business. Diversification into New Zealand is still in its early stage and is not likely to contribute in a meaningful way in the near term. JB Hi-Fi reported NPAT down 7.55% to $109.7m for the year ended 30 June 2011. Total sales growth was 8.3%, with comparable store sales growth negative 1.2%. Revenues from ordinary activities were $2.96bn, up 8.35% from last year. Diluted EPS was 101.10 cents compared to 108.42 cents last year. Net operating cash flow was $109.95m compared to $152.10m last year. The final dividend declared was 29 cents, taking the full year dividend to 77 cents compared with 66 cents last year. Assuming trading conditions are comparable with FY11, the company expects sales in FY12 to be circa $3.2bn, an 8% increase on the prior year.