The JB Hi-Fi Limited (ASX: JBH) share price has dropped lower this morning following the release of a trading update.
At the time of writing the retailer's shares are down 1.5% to $25.49.
What happened in the third quarter?
Despite the housing market downturn, JB Hi-Fi has performed well in the third quarter of FY 2019.
According to the release, the JB Hi-Fi Australia business delivered third quarter sales growth of 2.6% and comparable sales growth of 1.5%. This is especially pleasing given the strong growth it was cycling from the prior corresponding period. It also means that year to date sales have increased 4.1% or 2.7% on a comparable sales basis.
Things weren't quite as positive for the JB Hi-Fi New Zealand business. It experienced a 1.2% decline in sales during the third quarter, though like for like sales improved by 4.6%. Year to date sales are up 3.7% and comparable sales are up 10.2%.
Finally, The Good Guys business posted total sales growth of 2.2% in the third quarter, with comparable sales increasing 1%. Year to date this means total sales are up 2.6% and comparable sales are up 1.3%.
What's next?
This quarterly result was largely in line with management's expectations, which means that it has reaffirmed its FY 2019 guidance.
It continues to expect total group sales of ~$7.1 billion. This comprises sales of $4.73 billion from JB Hi-Fi Australia, NZ$240 million from JB Hi-Fi New Zealand, and $2.15 billion from The Good Guys.
Total group net profit after tax is expected to be in the range of $237 million to $245 million, which represents a year on year increase of between 1.6% to 5.1%.
Should you invest?
Whilst I've been pleasantly surprised with the performance of both JB Hi-Fi and Harvey Norman Holdings Limited (ASX: HVN) this year, I think their shares are fully value now after a decent share price rally in 2019.
In light of this, I would sooner buy retail shares such as Accent Group Ltd (ASX: AX1) and Super Retail Group Ltd (ASX: SUL), which I feel offer better value for money.
