JB Hi-Fi has adjusted its profit forecast for the financial year amid challenging conditions and the introduction of a new retail competitor into the Australian market, a Woolworths-Lowes joint venture.
The company reduced its net profit after tax guidance to between $108.5 million to $113.5 million, from its previous forecast of $134 million to $139 million.
The downgrade followed news that it would restructure its white goods mass-merchant retailer Clive Anthonys and pursue a share buyback scheme.
The review of Clive Anthony was deemed "necessary" by the company following what it said were "several years of disappointing returns which deteriorated in 2011".
The 10 Clive Anthony shops would either be rebranded to JB HI-Fi, be repositioned or relocated.
"As part of the process JB Hi-Fi will book a one-off consolidated post tax charge of $24.8 million relating to its Clive Anthony’s business in its full year 2011 results," the company said in a statement to the ASX.
Chief executive Terry Smart told CRN that the introduction of US hardware giant Lowes, which has partnered with Woolworths to expand in Australia, added to the pressure of an already tough whitegoods market.
"The whole market remains tough," he said.
In contrast, Smart said, JB Hi-Fi was buoyed by its scale and diverse product range.
"Visual products were down through price deflation but other categories including computers offset that," he said. "The Apple iPad 2 had a strong launch," he added.