JB Hi-Fi posts record sales on back of online boom

Tech-hungry consumers have helped to propel JB Hi-Fi to record sales of $9.2 billion for 2022 as online electronics purchases surged despite bricks-and-mortar stores reopening.

The ASX-listed home appliances retailer released a trading update on Tuesday outlining that it expects to report a 2022 net profit after tax of $544.9 million next month, up 7.7 per cent on last year.

JB Hi-Fi was among the companies seeing downgrades from analysts on Tuesday.Credit: Will Willitts

JB Hi-Fi’s preliminary financial results show sales up 3.5 per cent to $9.2 billion and earnings before interest and tax up 6.9 per cent to $795 million.

The company’s online sales helped fuelled the result, up by close to 53 per cent to $1.6 billion. Online purchases now contribute 17.6 per cent of the company’s total sales. When the company reported its full-year financial results in 2019, that figures was just 5.5 per cent of sales.

JB Hi-Fi chief executive Terry Smart said the record earnings performance came down to the success of both of the retailer’s sales channels.

“The benefits of having a strong multichannel strategy were especially evident in the second half as COVID-19 restrictions eased and customers returned to shopping in-store, whilst continuing to shop with us online,” he said.

Sales at white goods brand The Good Guys also performed strongly, up 7.7 per cent for the June quarter and 2.7 per cent for the year overall.

Rising interest rates and inflation have led to speculation of a spending slowdown for non-discretionary goods, but JB Hi-Fi said on Tuesday that sales momentum had been strong throughout the year.

The COVID-19 pandemic helped fuel sales of consumer electronics hardware like game consoles and computers, which often have lower margins than other tech like computer software or games.

However, as Barrenjoey analysts point out in a recent note, supply shortages of many electronic products have helped with margins.

“JB Hi-Fi’s gross margins ought to have reduced but given less discounting as product was in short supply, gross margins have actually expanded significantly,” consumer analyst Tom Kierath said in a note last month.

The company’s shares traded at a high of $55.85 last March but have slid 16.2 per cent this year to sit at $40.88 at Monday’s close.

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