Dick Smith has posted strong sales growth in the 2015 first half, while its net profit after tax was up marginally year-on-year, with the retailer bullish in its outlook for the second half of the year.First-half sales of $693.8 million were up 8.9 per cent year-on-year, while net profit after tax of $25.2 million represented a 0.8 per cent rise.
Dick Smith managing director and CEO Nick Abboud stated the retailer’s growth strategy is “performing strongly”.
“We delivered profitable comparable and total sales growth, despite challenging market conditions,” Abboud commented.
“We expect further strong performance from our growth strategy and anticipate approximately 10 per cent total sales growth in 2015.”
Australian sales grew 12.2 per cent during the half, however New Zealand sales declined 9.3 per cent, which Dick Smith attributed to “aggressive competitive pricing and a deterioration in consumer sentiment, particularly in the second quarter”.
Overall, comparable sales for the half were up 2 per cent.
“Throughout the half we were able to deliver sales growth and gained market share in our core categories,” Abboud stated.
“Achieving this growth is particularly pleasing given that independent industry data from GfK suggests that throughout the half Australian consumer electronics were flat in terms of total sales.”
Dick Smith’s store network now totals 385 across Australia and New Zealand, with 65 new stores opened since the retailer embarked on its growth strategy 18 months ago.
In the 2015 first half 11 new stores were opened, while Move by Dick Smith at Sydney Airport has commenced trading today.
Under the store rollout program, Abboud stated Dick Smith envisages approximately 450 stores by 2017.
“We are on track to open nine stores in 2H 2015,” he commented.
“In addition, today we commenced operating in several high-traffic areas within Sydney Airport in partnership with Heinemann, the operator of the duty free business, under the Move by Dick Smith banner, and we look forward to its contribution to the business.”
Meanwhile, Abboud noted online sales now represent over 7 per cent of Dick Smith’s retail sales amid an anticipation of achieving an objective of more than 10 per cent “well before” the 2017 financial year.
Dick Smith’s January sales were up over 17 per cent, with February sales to date exhibiting double-digit growth, with total sales growth for the year to date now exceeding 10 per cent, while comparative sales growth is over 3 per cent.