The JB Hi-Fi Limited (ASX: JBH) share price is under the spotlight today after the business announced its sales update for the March 2023 quarter.
JB Hi-Fi operates three businesses – JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys.
FY23 third quarter sales
The company reported that its quarterly comparable sales for JB Hi-Fi Australia fell 0.1%, while total sales rose by 0.8%, compared to the third quarter of FY22.
In New Zealand dollar terms, JB Hi-Fi NZ saw comparable and total sales growth of 10.8%.
The Good Guys saw comparable and total sales decline by 3.8%.
However, compared to FY19, total JB Hi-Fi Australia sales were up 38.8%, NZ sales were up 30.1% and The Good Guys sales were up 22.4%. In other words, it’s still selling a lot more than pre-COVID times.
While sales growth has been slowing throughout the year, the total sales for the year have been strong. In FY23 to the end of March 2023, total JB Hi-Fi Australia sales have grown by 6.5%, JB Hi-Fi New Zealand sales grew by 14.5%, while The Good Guys sales increased by 3.8%.
What to make of this update for the JB Hi-Fi share price
JB Hi-Fi said the business Pleased with the third quarter trading result with “sales continuing to be well above pre-COVID FY19” levels.
But, it also said that, as expected, sales growth has started to moderate from the elevated levels seen in the first half of FY23, but its “trusted value-based offerings have continued to resonate” with customers and it has grown its market share.
If you could go back 12 months and tell people how high the Australian interest rate has gone, yet JB Hi-Fi Australia is still managing to achieve total sales growth, I think people would be surprised.
While it’s good for the company that its sales are performing so well, I’d guess it’s a small sign of why the RBA felt it needed to increase interest rates again in May.
I wouldn’t call the ASX retail share great value at the moment. There have been times when the JB Hi-Fi share price has been under $40 over the last year. So, I’d wait until it’s at least under $42 if I were interested in buying shares – it’s barely registering signs of a sales decline yet. I think the next few quarters of sales could show more pain, which could impact the market’s thoughts on the business.
