It's high fives for JB Hi-Fi's latest profit predictions
The electronics retailer said expected net profit would be about $112 million to $116 million, a 7 to 12 per cent rise from the previous corresponding period. Previous guidance was for $108 million to $112 million.
It estimated that sales would rise from $3.25 billion to $3.3 billion.
"This updated guidance has been driven by stronger-than-expected sales in the second half of the 2013 financial year," JB Hi-Fi said.
Shares jumped as high as $16.93 after the announcement on Friday before closing $1.25 higher at $16.75.
The stock is up about 60 per cent since February this year when chief executive Terry Smart said the company would return to profit growth this year and reported early indications of strong sales growth and stabilised gross margins.
Retailer Gerry Harvey confirmed last month that conditions were improving with Harvey Norman registering its first quarterly sales growth in almost two years.
JB Hi-fi said gross margins had remained "relatively stable" for the four months to April 30 and continued to track ahead of the same trading period last year.
Sales growth in Australia and New Zealand for the four months to April 30, 2013, was 10.3 per cent - more than double the sales growth for the 10 months to April 30.
Comparable store sales growth was 3 per cent for the four months to April 30. For the 10 months to April 30, comparable sales dropped 1.3 per cent, an improvement from the 3.5 per cent drop in comparable sales for the December half year.
The company said it had opened 13 new stores in Australia this financial year and would have 177 stores in operation by June 30.
Frequently Asked Questions about this Article…
JB Hi‑Fi raised its net profit guidance to about $112 million–$116 million for the financial year, a 7%–12% increase from the previous corresponding period. This replaced earlier guidance of $108 million–$112 million.
The company said the updated guidance was driven by stronger‑than‑expected sales in the second half of the 2013 financial year, confirmation that last year’s 'unsustainable discounting' has ended, and signs of stabilised gross margins.
Shares jumped to a year high after the announcement, peaking at $16.93 and closing $1.25 higher at $16.75. The stock had also risen about 60% since February in the run up to the update.
JB Hi‑Fi estimated total sales would rise from $3.25 billion to $3.3 billion. Sales in Australia and New Zealand for the four months to April 30, 2013, grew 10.3% — more than double the growth rate for the 10 months to April 30.
Comparable‑store sales were up 3% for the four months to April 30. For the 10 months to April 30, comparable sales dropped 1.3%, an improvement from a 3.5% decline in the prior half. Gross margins were described as 'relatively stable' for the four months to April 30 and tracked ahead of the same trading period last year.
The company opened 13 new stores in Australia during the financial year and said it would have 177 stores in operation by June 30.
Yes — retailer Gerry Harvey noted improving conditions, with Harvey Norman registering its first quarterly sales growth in almost two years, which supports a broader retail improvement theme referenced in the article.
The update shows JB Hi‑Fi lifted profit guidance due to stronger second‑half sales, stabilised gross margins and an end to heavy discounting. That news sent the share price higher and follows strong short‑term sales growth and ongoing store expansion. These are factual trends from the company’s 2013 financial‑year update that investors may want to consider alongside their own research.
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