Much maligned consumer electronics retailer, JB Hi-Fi Limited (ASX: JBH) has today upgraded its sales and profit forecast for the 2012 financial year.
Stronger than expected sales in the second half of this fiscal year will see revenues of around $3.3 billion, up from the original forecast of $3.25 billion, while net profit is forecast to come in between $112 to $116 million. That’s up 7% to 11% over the previous year.
Like for like sales, which excludes newly opened stores, were up 3% in the four months ending April 2013. That’s an improving trend, with like-for-like sales over the previous 10 months down 1.5%, and better than the 3.5% fall at the half year. Pleasingly, gross margins have remained relatively stable in the last four months, and continue to track ahead of last year’s comparative period.
JB Hi-Fi has opened 13 new stores in Australia in the current financial year, and expects to have 177 stores open by the end of June 2013.
Improving consumer sentiment and the ongoing evolution of consumer electronics products continues to drive sales, with new smart TVs, new smart phones, including Samsung’s S4 Galaxy and the iPhone 5, new tablets, notebooks, cameras and audio equipment arriving in the past 10 months. New games consoles from both Sony and Microsoft and new games are expected to drive sales in the 2014 financial year.
JB Hi-Fi also sees significant upside from commercial sales, which has grown by 50% in the year to date. The company’s expansion into home appliances appears to be positive, with JB Hi-Fi reporting encouraging sales.
The recovery in consumer electronics sales has seen JB Hi-Fi’s shares rise by more than 50% in the past year, with competitor Harvey Norman Holdings (ASX: HVN) shares climbing by 44%, compared to the S&P / ASX 200 Index’s (Index: ^AXJO) (ASX: XJO) 19% gain.
As JB Hi-Fi outlined in a presentation today, it’s not about bricks-and-mortar versus online only, it’s about a seamless customer experience, giving consumers the flexibility to choose how and when they buy their products. So far, the strategy appears to be working for JB and the death of JB Hi-Fi has been greatly exaggerated.
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