Shares in JB Hi FI are expected to take a beating this morning after the company issued a statement to the market downgrading sales projections for the Christmas period.
For the six months to December 31 this year the discount retailer said earnings before interest and tax would be 5 percent lower than for the same period last year. The biggest drag it said was heavy price reductions in the industry, especially of flat screen TVs which it said had fallen by up to 25 percent in some cases.
The projected earnings drop comes despite JB HI Fi having opened several new stores over the past year.
On the bright side, JB reiterated that it saw strong growth in the past six months for computers, IT and accessories after a flat performance in the first quarter. It also reported an impressive 80 percent jump in online sales while also issuing a positive report card for the newly launched digital streaming music service JB Hi-Fi NOW.
Nevertheless, JB’s sales downgrade was bleak news for the retail industry in which it is considered among the more resilient players.