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JB Hi-Fi share price on watch after reporting strong sales growth during the COVID-19 crisis

The JB Hi-Fi Limited (ASX: JBH) share price will be one to watch this morning after the release of its third quarter sales update.

How did JB Hi-Fi perform in the third quarter?

The retail giant was on form again in the third quarter and delivered solid sales growth across most of its business.

According to the release, the company experienced an acceleration in sales in late March as customers prepared for a potential increase in government restrictions.

This led to the JB HI-FI Australia business reporting an 11.6% increase in total sales and an 11.3% lift in same store sales during the third quarter. This brought its year to date sales growth to 6.9% and same store sales growth to 6.4%.

The Good Guys business performed even better and recorded total and same store sales growth of 13.9% in the third quarter. This lifted its year to date sales growth to 5.4% and 4.9% on a same store basis.

Things weren’t so positive for the JB Hi-Fi New Zealand business, which was forced to close its doors towards the end of the quarter. The majority of these stores are now open as normal. It recorded a third quarter total sales and same store sales decline of 3.3%. Year to date its sales are now down 0.4%.

April and May update.

Pleasingly for shareholders, the company’s strong sales growth in Australia continued into April and early May.

This has been driven by increased demand for the home appliances and technology products consumers need for working, learning, and entertainment whilst at home.

However, despite this strong form, management does not intend to reinstate its guidance for FY 2020.

It believes the uncertainty and ongoing disruption to customer shopping patterns as it enters the important end of financial year trading period, means it is not appropriate to provide guidance at this time.

The company’s CEO, Richard Murray, commented: “I would like to thank our over 12,000 team members who are doing an incredible job in what is an unprecedented time. Our customers have turned to us for their technology and home appliance needs as they adapt to these unique circumstances, and our team members have responded and adapted in an amazing manner to make sure we can do it safely and effectively. While the outlook for the remainder of the financial year is uncertain, we continue to be in a strong financial and operational position.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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