JB Hi-Fi Limited (ASX: JBH) has released a Q1 FY21 trading update at its AGM. Are JB Hi-Fi shares actually a growth opportunity?
A strong first quarter for JB Hi-Fi
The electronics retailer has announced its first quarter sales to 30 September 2020.
JB Hi-Fi Australia generated total sales growth of 27.3%. The Good Guys experienced total sales growth of 30.9%. However, JB Hi-Fi New Zealand suffered a sales decline of 2.5%.
The company said that all stores located in Melbourne re-opened on 28 October 2020. However, it will still be offering home delivery and contactless click & collect.
JB Hi-Fi CEO Richard Murray said: “We are pleased to report very strong comparable sales growth in Australia, even with our metropolitan Melbourne stores temporarily closed to customers during this period.
“Our online businesses have continued to scale and meet the needs of our customers in a period where restrictions have impacted their ability to visit our stores. This online growth combined with continued sales momentum in stores across the rest of Australia, has resulted in a strong start to FY21 and positions us well as we enter the key Christmas trading period.”
This was a solid update, though it still isn’t going to provide earnings guidance. The company has continually impressed since Amazon arrived. It was claimed that Amazon would really hurt JB Hi-Fi. That doesn’t seem to have happened at all.
At the current share price of $49, JB Hi-Fi is priced at 20 times the estimated earnings for the 2022 financial year. I’m not jumping to buy today. Will growth stop as stimulus slows down? We’ll have to see.
There are other retailers I’d buy first like City Chic Collective Ltd (ASX: CCX) which are growing globally.