The JB Hi-Fi Ltd (ASX: JBH) share price is down around 4% after the retailer announced its FY24 third quarter update.
This retail company operates JB Hi-Fi stores in Australia and New Zealand, as well as The Good Guys in Australia.
FY24 third-quarter update
JB Hi-Fi revealed its sales for the period 1 January 2024 to 31 March 2024.
For the JB Hi-Fi Australia division, comparable sales were down 0.3% and total sales were down 0.1%, taking FY24 year to date total sales growth to 0.5% (with flat comparable sales in FY24).
JB Hi-Fi New Zealand reported total sales growth of 16.8% for the quarter, helped by comparable sales growth of 2.9%. This takes total sales growth for the year to date to 8.5%, with flat comparable sales growth.
The Good Guys total sales and comparable sales were down 0.8% in the FY24 third quarter. Its total sales and comparable sales were down 7.3% in FY24 to the end of the third quarter.
Australian sales seem to be challenged, which seems to be a downside for JB Hi-Fi shares.
Commenting on the sales performance, JB Hi-Fi said it is a challenging and competitive retail market, but the sales were “resilient and in line with the group’s expectations”.
Management comments
The JB Hi-Fi CEO Terry Smart said:
We are pleased with our Q3 FY24 sales results. Our trusted value-based offerings and high levels of customer service continue to resonate with our customers.”
Final thoughts on the JB Hi-Fi share price
The JB Hi-Fi share price has gone up more than 20% in the past six months, which is a rapid rise. It’s normal for there to be a bit of a correction when investors get a look under the hood at the sales, if the performance didn’t match expectations.
The valuation increase has come without any evidence of a sizeable improvement in actual sales – investors appear to be looking ahead rather than seeing how performance is challenged at the moment (and perhaps over the rest of 2024?) with high elevated interest rates.
JB Hi-Fi is one of the best retail businesses in Australia, in my opinion. But, I’d rather invest when the market is worried about the retail industry rather than confident amid this period of higher price/earnings ratios (p/e ratios).
For me, there are other ASX dividend shares and other ASX growth shares that could provide better returns.
