JB Hi-Fi shares slump on margin warning

JB Hi-Fi shares slump on margin warning

JB Hi-Fi shares slump on margin warning

JB Hi-Fi today said online sales nearly doubled since the launch of a new website in August last year, accounting for 3.8 percent of first-half sales, or $4.8 million, compared to 2 percent a year earlier.

The retailer has declared an interim dividend of 86 cents (fully franked) per share - a notable 19% increase from the previous corresponding period. Statutory profit after tax was up 37.4% to $151.7 million. Revenue fell 0.4 percent to $124.6 million and gross margin shrank 169 basis points to 16.31 percent. As far as online sales go, that improved as well with a 40.6% increase in sales online.

Sales growth in January marked a 7% increase, however, is lower than the 10% lift recorded past year.

On a brighter note, the company's online sales in New Zealand jumped 90 per cent to $4.8m and are now almost 4pc of total sales. This is compared to a result of $263 million in HY17.

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The company's 15 New Zealand stores are a small part to the Australian group's 311 JB Hi-Fi and Good Guys retail outlets.

"It was another strong result for the JB Hi-Fi business in Australia, particularly through the important November and December periods".

JB Hi-Fi closed one of its New Zealand stores in the six months ended December 31, while opening seven new stores in Australia.

The market is already cautious on retail companies due to the current economic climate in Australia, and any sign of weakness will likely result in selling pressure, as we've seen this morning.

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Performance of JB's New Zealand business was less pleasing.

However, for the full year the rise profit won't be as large. The Good Guys in particular is a concern, as the division contributed 30% to total group sales for the period.

Total sales growth for The Good Guys was 5.0% and comparable sales growth was 3.5% in January 2017, and the same figures fell to -3.5% and -4.7% respectively in January 2018. JB Hi-Fi came in at No. 218, and is only the third Australian retailer to boast a place.

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