JB Hi-Fi has reported a 13.3% lift in profits and an 8.3% increase in revenue for the year ending June 2011. Online grew 56% with CEO Terry Smart telling SmartHouse that online could be responsible for 10% of the Company’s business “because of the amount of foot traffic the online store drives into stores”.The Company has also announced a new music streaming service.
The consumer electronics and IT store recorded a full year net profit after tax of $134.4 million up from $118.7 million for FY10. Sales were $2.959 billion for the period ending on 30th June 2011.
Total sales growth was 8.3%, with comparable store sales growth negative 1.2%.
Gross margin was 22.0% and cost of doing business was flat at 14.5% the Company said.
Smart said JB Hi-Fi anticipates launching a new music subscription streaming service in the second quarter of FY12.
This new service will leverage off the Company’s strong music heritage and is a natural extension to its current physical music sales Smart told ChannelNews.
A staged roll-out is anticipated over the quarter for Mac and PC, with a mobile solution to be added shortly after. “We intend to have between 6 to 8 million tracks from 100,000 artists at launch and will continue to grow this number over time. The service will allow for unlimited access and listening to music from your Mac, PC or mobile device” he added.
Smart said that online sales grew 51.6% over the full year and were up 68.1% in the second half. The JB Hi Fi online store attracts 800,000 unique visitors a week.
CEO Terry Smart said “Our buying power and low cost of doing business will ensure we maintain our competitive online offer. We continue to enhance the customer online experience with the introduction of a mobile friendly website to browse, explore and transact online, combined with a new gift card module which enables our customers to activate and manage their JB Hi-Fi Gift Cards online. We will shortly enhance the offer further with the additional convenience of being able to order online and pick-up in store.”
While sales in July remained challenging the Company had positive total sales growth for JB Hi-Fi branded stores of 6.4%, with comparable stores sales negative 3.3%.
“While we anticipate the market will remain challenging, we will continue to focus on driving market share growth through our core strengths of everyday low prices, great people and our low cost of doing business. When combined with the opening of 16 stores, the maturing of recently opened stores and our continued online focus, we are well positioned to maximise growth through the next 12 months” said CEO Terry Smart.
JB Hi-Fi expects FY12 to be another solid year of sales and earnings growth. Assuming trading conditions are comparable with FY11, the Company expects sales in FY12 to be circa $3.2 billion, an 8% increase on the prior year.
More to follow.
