Australia's JB Hi-Fi retreats from record highs on lower gross margins

JB Hi-Fi

10/02/2025 02:04

By Sherin Sunny
       Feb 10 (Reuters) - JB Hi-Fi  JBH.AX  posted an 8% rise
in its first-half profit on Monday, aided by strong sales across
its operations, though shares retreated from all-time highs as
the market's attention shifted to the decline in the retailer's
gross margins.
    Shares of the consumer electronics retailer were down 3.2%
at A$3.2 by 0126 GMT. Earlier in the session, stock rose as much
as 5.5% to a record high of A$108.08. 
    The company's net profit after tax for the half year ended
December 31 rose to A$285.4 million ($178.52 million), up from
A$264.3 million a year earlier. This was above Visible Alpha's
consensus of A$278.3 million.
    The company's half-yearly gross margin declined by 17 basis
points to 21.8% for its Australia operation on gross margin mix
and increased competitive activity and by 25bps for its unit,
The Good Guys (TGG). 
    Citi predicts a decline in share prices due to weak gross
margins but expects positive sales in January to help limit the
losses.
    Sales for January from JB Hi-Fi Australia rose by 7.1% while
that of TGG climbed 5.9%.
    "We consider this a strong update given concerns of a
pull-forward of sales into the key promotional events of Black
Friday and Boxing Day," Citi said in a note.
    The electronics retailer announced an interim dividend of
170 Australian cents apiece, compared with 158 AU cents per
share a year earlier and slightly below Citi's expectations of
176 AU cents.
    JB Hi-Fi is the first among Australian discretionary
retailers to issue its half-year results, with competitors
Harvey Norman  HVN.AX  and Super Retail  SUL.AX  scheduled to
report later in the month.
    Analysts expect Australian discretionary retailers to
benefit from a potential reduction in interest rates this year. 
    High borrowing costs have made consumers more cautious about
spending during the ongoing cost-of-living crisis, putting
pressure on retailers.
    

    ($1 = 1.5987 Australian dollars)

 (Reporting by Sherin Sunny in Bengaluru; Editing by Sherry
Jacob-Phillips)
 ((Sherin.Sunny@thomsonreuters.com;))