Retailer JB Hi-Fi Limited (ASX: JBH) released its 2018 financial report showing a 22% jump in total sales to $6.9 billion and a profit of $233 million, up 12%. JB Hi-Fi will pay a final dividend of 46 cents per share.
Analysts surveyed by Bloomberg had been expecting a profit of $230 million, so the result appears to be a modest beat on expectations. JB Hi-Fi was expected to pay full-year dividends of $1.31 per share. Its actual dividends totaled $1.32 per share, fully franked.
Looking Under The Hood
Adjusting for store openings, JB Hi-Fi’s comparable sales in Australia jumped 6% while its New Zealand and The Good Guys business units reported comparable sales up 2% and 1%, respectively.
“We are pleased to have delivered another year of record sales and earnings in FY18,” CEO Richard Murray said, commenting on the results.
“It was another strong result for the JB HI-FI business in Australia, as we continue to delight our customers and deliver on our strategic objectives.”
The company said its key growth categories included Communications, Computers, Games Hardware and Drones. Online sales grew 32% to $210 million, or just under 5% of total sales.
The Good Guys
JB Hi-Fi acquired The Good Guys in 2016 but the business has failed to hit its straps since then. Murray said the second half of its 2018 financial year was again a little challenging but there is light at the end of the end of the tunnel.
“Whilst it was a challenging second half for the The Good Guys business, we made strong progress towards our key initiatives as we position the business for future growth,” Murray noted.
Outlook
Looking into its 2019 financial year, the company expects to open five JB Hi-Fi Australia stores and close one in New Zealand. It will also open two The Good Guys stores.
2019 sales are expected to reach $7.1 billion. “We are clear on our objectives for the next 12 months and are excited in the outlook for the business,” Murray concluded.
So far in 2018 shares of brick-and-mortar retailers like JB Hi-Fi and Harvey Norman Holdings Limited (ASX: HVN) have been sold lower as the threat on online retailing continues to build.
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