JB Hi-Fi Group has reported a 12.3 per cent increase in net profit year over year at $233.2 million in its FY2018 statement, up from $207.7 million in 2017.
Similarly, total sales for the period rose 21.8 per cent to $6.85 billion, up from $5.62 billion, and dividend per share rose by 11.9 per cent, from $1.18 to $1.32.
“We are pleased to have delivered another year of record sales and earnings in FY18. It was another strong result for the JB Hi-Fi business in Australia, as we continue to delight our customers and deliver on our strategic objectives,” said Group CEO Richard Murray.
“Whilst it was a challenging second half for the The Good Guys business, we made strong progress towards our key initiatives as we position the business for future growth.”
The Good Guys business was acquired by JB Hi-Fi in 2016, and comparative sales for the period of ownership were up 0.9 per cent, with total sales increased by 1.5 per cent. Online sales for the period were up 7.4 per cent to $126.8 million, or 6 per cent of total sales.
JB Hi-Fi’s Australian business found key growth in communications, computers, audio, games hardware and drones, and online sales grew by 32.1 per cent to $209.0 million, or 4.6 per cent of total sales. Gross profit increased by 9.1 per cent to $1 billion, with a gross margin of 22.2 per cent.
The group’s New Zealand offering saw total sales decline by 1.1 per cent to NZ$231.5 million, with two New Zealand stores closed during the period, while comparative sales increased by 2.4 per cent. Online sales for the region grew by 96.3 per cent to NZ$9.6 million, or 4.1 per cent of total sales.
“As new products, click and collect, and online order fulfilments have increased JB Hi-Fi’s sales volumes, the company has concentrated on controlling its operating costs. This has remained a competitive advantage for the company and has allowed JB Hi-Fi to report an increase in net profit after tax of 12.3% to $233.2 million in 2017-18,” said IBISWorld Senior Industry Analyst Kim Do.
“Australian consumers have become increasingly value-conscious, as online-only operators such as Amazon and Kogan offer low prices for a wide range of products. While JB Hi-Fi has increased its Australian online sales by 32.1% over the year, to reflect 4.6% of total sales, the ongoing expansion of Amazon will put pressure on the company over the next five years.”
The company noted that in FY19 it expects total group sales to reach $7.1 billion. It plans to open five further JB HI-FI stores in Australia and two The Good Guys stores, and to close one further New Zealand store.
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