The share price of electronics retailer JB Hi-Fi Limited (ASX: JBH) rose 11.5% today after reporting its half-year result for the six months to December 2019.
That's a really strong response for a business that has been going for almost 50 years which many people thought had reached its peak a few years ago.
Why did the JB Hi-Fi report sent its share price up so much?
The retailer reported that total sales were up 3.9% to $4 billion.
JB Hi-Fi Australia sales went up 5.1% to $2.72 billion with comparable sales growth of 4.4%, online sales jumped 18.3% to $170.8 million, being 6.3% of total sales. This revenue growth, combined with cost control and lower depreciation, caused earnings growth. Earnings before interest and tax (EBIT) was up 6.5% to $204.5 million with the EBIT margin up 0.1% to 7.5%. In January 2020 the company saw total sales growth of 6.5% with comparable sales growth of 6%.
JB Hi-Fi New Zealand sales grew by 0.8% to NZ$132.8 million with comparable sales up 0.8%. Online sales increased 22.3% to NZ$9.6 million, being 7.3% of total sales. However, gross margins fell 0.16% to 17.4% and costs increase, causing EBIT to come in at NZ$1.1 million. In January 2020 the company saw a total sales decline of 1.6% with a comparable sales decline of 1.6%.
The Good Guys sales rose by 1.5% to $1.15 billion, with comparable sales up 0.6%. Online sales increased by 12.6% to $79.6 million, being 6.9% of total sales. EBIT rose by 14.7% to $50.1 million with the EBIT margin rising by 0.5% to 4.4%. In January 2020 the company saw total sales growth of 1.4% with comparable sales growth of 1.4%.
Before the effects of the new accounting standards, half-year net profit rose by 8.9% to $174.4 million, with earnings per share (EPS) also up 8.9% to 151.8 cents per share.
The interim dividend was increased by 8.8% to $0.99 per share.
JB Hi-Fi increased its total sales expectations to $7.33 billion, with net profit expectations (pre AASB 16) to be in the range of $265 million to $270 million, an increase of 6.1% to 8.1%.
Another impressive result with further growth expected has caused more excitement in this low interest rate environment.
