The JB Hi-Fi Limited (ASX: JBH) share price has risen in reaction to a strong FY21 half-year result.
JB Hi-Fi HY21 report
The electronics retailer announced that its total sales had risen by 23.7% to $4.9 billion for the first half of FY21, with online sales surging 161.7% to $678.8 million.
Drilling down to the individual divisions, JB Hi-Fi Australia grew sales by 23.3% to $3.36 billion, with comparable sales growth of 24.2%. There was continuing strong customer demand for consumer electronics and home appliance products. Online sales grew by 201.9% to $515.6 million, representing 15.4% of total sales. Gross profit increased 22.7% to $737.4 million, with a lower gross profit margin due to the sales mix.
JB Hi-Fi New Zealand total sales grew 9.1% to NZ$144.9 million and The Good Guys sales went up 26.4% to $1.45 billion. In The Good Guys, the key growth categories were refrigeration, portable appliances, laundry, floorcare, televisions and computers.
JB Hi-Fi’s EBIT (EBIT explained) grew by 76% to $462.8 million. The net profit after tax (NPAT) went up by 86.2% to $317.7 million. Profit / earnings per share (EPS) also grew by 86.2% to 276.5 cents.
Management have continued to focus on investing in online and supply chain operations, including upgrades to the group’s websites and expanded delivery and warehouse options.
JB Hi-Fi dividend
The JB Hi-Fi board decided to declare a half-year dividend of $1.80 per share. This was up 81.8% and it represented 65% of net profit after tax.
The board said that it will continue to regularly review the amount of capital that the business has, with a focus on maximising returns to shareholders and maintaining balance sheet strength and flexibility.
Trading update
In January 2021, JB Hi-Fi Australia sales are up 17.3%, JB Hi-Fi New Zealand sales are up 21.7% and The Good Guys sales are up 14.1%.
Summary thoughts
JB Hi-Fi is generating extraordinary profit growth during these unprecedented times of COVID-19 and the related impacts. It seems that consumers continue to spend on electronics whilst other spending categories are limited to them. The key question is – how long will it continue?
For starters, it will be hard for JB Hi-Fi to beat the comparable months in 2020 when we get to April, May and June 2020 when that sales surge started.
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