The JB Hi-Fi Limited (ASX: JBH) share price is under the spotlight after reporting another strong result with its HY23 report.
JB Hi-Fi, which also owns The Good Guys, sells a wide range of electronics, fridges and other household appliances.
JB Hi-Fi HY23 result
Here are some of the highlights from the result for the six months to 31 December 2022:
- Total sales increased by 8.6% to $5.3 billion
- EBIT (EBIT explained) grew 14% to $479.2 million
- Net profit after tax (NPAT) increased 14.6% to $329.9 million
- Profit / earnings per share (EPS) rose by 20.4% to $3.02
- Half-year dividend by 20.9% to $1.97
The ASX retailer share revealed that there was continued elevated customer demand for consumer electronics and home appliances, plus well-executed Black Friday and Boxing Day promotional periods.
Rising profit margins helped JB Hi-Fi grow its net profit faster than sales, though there was a higher cost of doing business (CODB) as the retailer compared against COVID-related store closures in the previous year.
Dividend
JB Hi-Fi’s $1.97 interim dividend was double what was paid in HY19 and HY20. This payment represents 65% of net profit.
The company said that it continues to maintain a strong balance sheet, with closing net cash of $391.2 million at 31 December 2022.
JB Hi-Fi said that its board will continue to regularly review the group’s capital structure with a focus on “maximising returns to shareholders and maintaining balance sheet strength and flexibility.”
2023 trading update
JB Hi-Fi revealed how sales in January 2023 performed.
Total sales growth for JB Hi-Fi Australia was 2.5%, for JB Hi-Fi New Zealand was 20% and for The Good Guys it was 0%.
The JB Hi-Fi CEO Terry Smart said:
While we are pleased with the January trading result, with sales continuing to be well above pre-COVID January 2020, we have seen sales growth start to moderate from the elevated levels seen in the first half of FY23. As we enter an uncertain period, our business is well placed with a proven ability to adapt to any changes in the retail environment and trusted value-based offerings that will continue to resonate with our customers and grow our market share.
Final thoughts on the HY23 result and the JB Hi-Fi share price
Another impressive result by JB Hi-Fi, with profit growth and dividend growth.
However, it seems that strong growth is at an end with sales growth in Australia now at low single digits. People weren’t going to keep buying more and more products every year.
I think JB Hi-Fi is a great retailer with a strong position in the market. I also believe that its earnings could hold up better than it did in the past because electronics seem to be more integral to the household – meaning less discretionary.
In my opinion, JB Hi-Fi shares could be worth considering under $40. Good dividends could continue to be a feature.
