Record year for JB as sales climb to $13.3bn for FY2012.
The retail giant also announced net profit (after tax) of $104.6m, which was in line with guidance, although a 5% drop from $109.7 m profit recorded in FY11.
This will come as good news for analysts who were predicting profit drops as high as 20%, as the retail downturn continues to hit high street stores.
JB sales growth in Australia and New Zealand of 7% is “pleasing considering the challenging trading environment,” said CEO, Terry Smart.
Last week, rival Harvey Norman announced a pre-tax profit of $227.6 million – a 39% dip and a sales slump locally of 8.1%.
“Our market share continues to grow with new stores performing well andonline sales growing strongly,” Smart added.Total sales for the Group, including Clive Anthonys stores, grew 5.7%.
Hardware sales grew 9.5% however, software including music, movies and games) was down 3%.
JB recorded “solid growth” in ‘Computers and Accessories’ while its ‘Visual’ category was down 15% although panel TV sales rose almost 13%.
Average selling price (ASP) in the TV category also fell a massive 24%, however the retailer reported “good unit growth in both branded and private label panels” sets.
Comparable store sales were -1.0%, however, the retailer noted improved sale trends in the second half of the trading year.
Unlike its rival Harvey Norman which shut several of its franchisees this year, 15 new JB Hi-Fi stores were opened in 2012 and one closed, as were three Clive Anthonys stores.
Online sales were “strong” – up 77% in FY12 – citing pick up in store and “factory scoop” on electronics including cameras as boosting performance.
The number of unique visitors to its sites rose 41.1% to 927,000, which is an average per week during the year.
However, direct online transactions are still low – just 1.6% of total sales – the site is an “important driver” of in store and online trading, said JB in a statement.
Commercial business also saw good growth with sales up 31.7% in FY12.
Smart said “the speed of industry consolidation increased significantly during the year and, while some short term pain was felt within our gross margin as competitors closed stores and cleared inventory, we expect this consolidation to be beneficial in the longer term.”
But he also said JB’s “best in class cost base” enabled the operation to manage “abnormal levels of price deflation and competitor discounting whilst continuing to trade very profitably.”
Looking to the future, he said “we are very well positioned for any rebound inconsumer spending.”
The Company expects to open 16 new JB Hi-Fi stores in FY13 and 3 smaller sub-stores will be closed.
Its in-house music streaming service JB HI-FI NOW continues to gain traction, with mobile apps for iOS, Android and Windows devices now available.
JB also said it is expanding its digital content into new categories and a new JB Hi-Fi website is also to go live, although did not reveal the nature of the new offering.
“We continue to see significant upside as our innovation and investment in these areas continues,” Smart said.
“Whilst our digital strategy is about future earning streams, online is a great opportunity for the brand to expand wellbeyond the categories we offer in store today.
“We continue to believe the future of retail is an integratedcustomer offer where our unique and high energy retail format, combined with our innovative online and digital platforms, will ensure JB Hi-Fi’s customer proposition is one that our competitors are unable to match,” said Smart.
Looking to the year ahead, July sales have seen growth of 5% and the retailer expects sales in FY13 to be up 5.5% or $3.30 billion on the current year.
Gross margin is currently in line with the prior comparative period. “FY13 holds great opportunities for us to continue to grow market share as we capitalise on the ongoing industry consolidation.”
At 30 June 2012, the Company has 168 stores (Australia: 155, NZ: 13) and says its target of 214 JB Hi-Fi stores should lead to “solid growth in the coming years.”
JB Hi-Fi shares rose 5.42% to $9.720 on the ASX today.
