The JB Hi-Fi Limited (ASX: JBH) share price is down 1% after revealing its March 2019 quarter sales.
JB Hi-Fi is one of Australia’s largest device and home appliance retailers with its network of The Good Guys and JB Hi-Fi stores. JB Hi-Fi was established in 1974 by Mr. John Barbuto (JB), trading from a single store in East Keilor, Victoria.
JB Hi-Fi’s Tough Quarter
The company’s flagship network of JB Hi-Fi Australia stores suffered from slowing growth, although the retailer did still report growth. FY19 third quarter sales growth was 2.6%, compared to 7.5% growth a year ago. This was achieved with comparable sales growth of 1.5%.
In the year to date, JB Hi-Fi sales were up 4.1%.
JB Hi-Fi New Zealand registered a total sales decline of 1.2%, although this was better than the 4.4% decline experienced last year in the third quarter. However, this segment apparently saw comparable sales growth of 4.6%.
The Good Guys achieved total sales growth of 2.2% in the third quarter on comparable sales growth of 1% in the third quarter of FY19.
Management re-affirmed that it expects FY19 to have total sales of around $7.1 billion with group net profit to be between $237 million to $245 million, which would be an increase of 1.6% to 5.1%. I think it’s impressive that JB Hi-Fi can still manage to create profit growth despite the falling Australian house prices.
The retailer claims it has the ability to compete effectively with traditional competitors and new market entrants. It will need to maintain its low cost of doing business to maintain its market position.
JB Hi-Fi is one of the best Australian retailers, but it operates in a very tough market. I can only see Amazon strengthening its position in the Australian retail market into the future from here. That’s why I would rather own shares of one of the proven ASX businesses in the FREE REPORT below.
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