JB Hi-Fi reports tough first half

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JB Hi-Fi reports tough first half

JB Hi-Fi today reported a 9.4 percent fall in net profit to $79.6 million for the half year ended 31 December 2011, while forecasting a five percent increase in sales for the full year.

The results were in line with the earnings downgrade issued by the company last December in anticipation of weak Christmas sales.

Earnings before interest and tax (EBIT) were $120.7 million, down 4.9 per cent from $127.0 million. Reflecting the price competitiveness of the retail sector, profits declined despite a 5.5 percent increase in half-year revenues to $1.77 billion. 

JB Hi-Fi reported flat sales for January with lower-than-expected sales in TV panels and weakness in IT accessories and cameras, supplies of which had been in short supply due to the Thailand floods. JB Hi-Fi-branded comparable store sales in January were down 5.5 per cent, the company said.

On the bright side, the company reported that sales for February were so far up 8.4 percent and on a comparable store basis grew one percent. For the first six weeks of the second half, sales for JB Hi-Fi branded stores rose 3.3 percent and on a comparable store basis were negative 3.9 percent.   

Online sales grew 87.7 percent for the half year, up over 100 percent for the month of December, largely thanks to the launch of JB Hi-Fi’s digital streaming music service JB Hi-Fi NOW.

The company affirmed its commitment to opening new bricks and mortar stores, reporting that 10 new Australian stores were opened in the first half with a further six planned for the second half of the financial year.

Shareholders were rewarded with a fully-franked interim dividend of 49 cents in line with JB Hi-Fi’s dividend payout policy of 60 percent of half year net profit for 2012.

The announcement did little to excite investors, however, with shares in JB Hi-Fi closing up just $0.04 to $12.03, well off last year’s high of over $16.50.

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