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JB Hi-Fi (ASX:JBH) share price climbs on impressive FY23 result, outlook

The JB Hi-Fi Limited (ASX: JBH) share price has climbed 2% in response to the FY23 report and the trading update for FY24.

FY23 result

Here are some of the highlights from the FY23 report:

JB Hi-Fi Australia total sales increased 5.6% to $6.55 billion and gross profit grew 67%.

JB Hi-Fi New Zealand total sales rose 11.3% to NZ$292.1 million, with gross profit only growing by 2.4% to NZ$46.7 million. There was price competitiveness in key categories.

The Good Guys total sales only went up 0.8% to $2.81 billion, with gross profit of $658.4 million.

JB Hi-Fi dividend

The board decided to declare a final dividend of $1.15 per share, which was 24.8% lower year on year.

JB Hi-Fi’s total dividend for FY23 of $3.12 was 1.3% lower and represented 65% of net profit.

Management are focused on maintaining a strong balance sheet, with the retailer finishing with closing net cash of $127.5 million.

Management commentary

JB Hi-Fi CEO Terry Smart said:

We are pleased to report record sales and earnings per share for FY23. In a challenging retail environment, we remained top of mind for shoppers and grew our market share by continuing to drive our value offering, leveraging the strength of our multichannel offer and maintaining our high levels of customer service.

With the heightened uncertainty in the retail environment, both our brands remain well positioned to leverage their low price market position as shoppers look to maximise value from their purchases. As we have continued to demonstrate, we will adapt and respond to the changing retail conditions to ensure we remain the number one destination for shoppers and grow our market share.

As always, we are thankful to our over 14,500 team members whose continued focus on delivering value and maintaining our high levels of customer service will ensure the long-term sustainability of the business.

Trading update

The retailer said that for July 2023, total sales growth for JB Hi-Fi Australia was a decline of 1.8%, JB Hi-Fi New Zealand sales were up 10% and The Good Guys total sales were down 12%.

These sales were “in line” with the company’s expectations because it was competing against elevated sales in July 2022. There is “increased variability” in the performance of different categories.

Final thoughts on the JB Hi-Fi share price

I’d rate JB Hi-Fi as one of the best retailers on the ASX, and it has shown in this result that customers still want to shop at its stores despite the pain of inflation and higher interest rates. I think spending on laptops and phones is more defensive these days because of how integrated they are for our lives.

I wouldn’t call it a buy today – it’s close to a 52-week high – but it could certainly be one to look at the next time the JB Hi-Fi share price falls more than 10%.

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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
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