Record profit as JB Hi-Fi leverages lockdown leisure

Record profit as JB Hi-Fi leverages lockdown leisure

Electronics retailer JB Hi-Fi Group (ASX: JBH) had no need for JobKeeper in FY20 as consumers arrived in droves to stock up on entertainment and working from home (WFH) goods, sending net profit after tax (NPAT) soaring by 21 per cent to $302.3 million.

Strong sales momentum continued in July for its Australian and NZ stores along with The Good Guys, but lockdowns in Melbourne and Auckland mean it won't entertain any speculation about results for the current financial year.

Online sales rose by almost half in FY20 to reach $600 million, although the percentage rise was much higher in Q4 at 134 per cent due to the pandemic, bolstered by a consolidation of supply chain and logistics capabilities in Sydney, Melbourne and Brisbane.

The group has also seen a significant acceleration of online sales in Victoria in the first 11 days following the stage 4 temporary store closures, which led to a shutdown of 46 JB HI-FI stores and 21 The Good Guys stores that is currently scheduled to end after mid-September.

But even with this massive growth online sales were just 7.6 per cent of the group's total sales of $7.9 billion, which were up 11.6 per cent.

JB Hi-Fi's Australian operations accounted for the greatest proportion of that $5.32 billion, with their sales growth rate outpacing the group's at 12.5 per cent.

However, it was The Good Guys that recorded the biggest jump in earnings with EBIT up 47.8 per cent to $107.8 million, driven by portable appliances, floorcare, laundry, computers and televisions.

This compares to a 26.2 per cent rise for JB Hi-Fi Australia to $380.8 million, whose leading sales categories were communications, computers, visual, audio and small appliances.

Group CEO Richard Murray says this is a strong result in the most challenging of times.

"We are pleased to report strong sales and earnings for FY20 and importantly, we have provided our customers with the products they required as they spent more time working, learning and seeking entertainment at home, and kept our team members in jobs with an absolute focus on health and safety," he says.

"I would like to recognise and thank our almost 13,000 team members who have done an incredible job in meeting the extraordinary challenges faced during FY20.

"Our customers have continued to turn to us for their technology and home appliance needs and our team members have responded and adapted in an amazing manner to make sure we can meet these needs safely and effectively."

This gratitude to staff was expressed through a $1,000 cash bonus to store and warehouse team members, adusted in accordance with hours for part-timers and casuals.

The company did not receive any wage subsidies from the Australian Government, although it did receive NZD$3 million in wage subsidies from the New Zealand Government while its stores in the country were closed.

Updated at 10:07am AEST on 17 August 2020.

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