Australia's JB Hi-Fi jumps to record high on market-beating interim results

JB Hi-Fi

12/02/2024 02:41

By Rishav Chatterjee
       Feb 12 (Reuters) - Shares of JB Hi-Fi  JBH.AX  jumped to
an all-time high on Monday, as the Australian consumer
electronics giant beat market estimates for interim results,
even as it battles a challenging retail environment and a
slowdown in spending.
    The company posted a net profit after tax of A$264.3 million
($172.43 million) in the first half of its financial year 2024,
beating Visible Alpha consensus estimates by 6% and Jefferies
expectations by 2.9%.
    JB Hi-Fi also beat estimates for sales, demonstrating its
resilience at a time when consumer spending has fallen and the
cost-of-doing-business for retailers has increased.
    "These results won't blow the market away, and investors
should know that it will be a challenging end to the fiscal year
for JB as retail sales slow further, with decade-high interest
rates continuing to take toll on households," said Josh Gilbert,
a market analyst at eToro.
    "However, the management has shown they can navigate tough
periods, and coming interest rate cuts as early as June will
remain a positive tailwind."
    Shares of JB Hi-Fi climbed as much as 7.1% to A$60.6, making
them the top gainer on the benchmark stock index  .AXJO , which
was trading down 0.3%.
    Sales at the company's Australian business grew 2.5% in
January and on a comparable sales basis, rose 1.7%. In New
Zealand, sales grew 8.2% but were down 4.1% on a comparable
sales basis.
    "Sales (in January) have topped estimates amidst a tricky
environment for retailers, and we didn't see a sharp slowdown in
sales in January that many had expected," said Gilbert.
    JB Hi-Fi has been tackling a fall in general consumer
sentiment across its Australia-New Zealand business. In October,
it had warned of a softening in sales at its Australian stores.
    
    ($1 = 1.5328 Australian dollars)

 (Reporting by Rishav Chatterjee in Bengaluru; Editing by
Subhranshu Sahu)
 ((Rishav.Chatterjee@thomsonreuters.com;))