The JB Hi-Fi Limited (ASX: JBH) share price posted solid gains across June, hitting highs of $43.86 before closing out the month at $43.03. This represents a 16% monthly increase, and an 83% rise on its low of $23.50 in March.
Since the end of June, the JB Hi-Fi share price has sat around the $42–$43 mark. Shares in JB Hi-Fi are up around 49% on this time last year, a significant outperformance on the S&P/ASX 200 Index (ASX: XJO) which is down 11% over the same period.
What drove the JB Hi-Fi share price higher in June
The increase in share price is impressive considering JB Hi-Fi's exposure to the economic downturn as a consumer discretionary retailer. However, JB Hi-Fi has benefitted from customers spending more time working, learning and enjoying entertainment at home.
In early June, JB Hi-Fi released a trading update and provided guidance on their operations. According to the release, the JB Hi-Fi Australia business had performed strongly during the pandemic. Second half sales were up 20% over the prior corresponding period both in total and on a comparable store sales basis. This compares to first half sales growth of 5.1% and brings its year to date growth to 11%.
Most notably, the Good Guys business performed exceptionally. Its sales were up 23.5% in 2H20. This has been a significant improvement on its performance during the first half, which saw the business deliver only a 1.5% increase in total sales.
In comparison, JB HI-FI New Zealand was impacted by temporary closures following New Zealand government lockdown restrictions. Its sales were well down. It is of note, however, that JB Hi-Fi's New Zealand arm is considerably smaller than the other businesses.
JB Hi-Fi's share price surprisingly dropped 4.24% after this announcement, however, it made a strong recovery in subsequent days.
In a nice side note, CEO Richard Murray noted the significant contribution of the group's team members and stated that JB Hi-Fi "are in the process of finalising a recognition program for our store team members to reflect their over and above efforts."
In June, JB Hi-Fi also provided guidance that it total sales were expected to be $7.86 billion, comprising of:
- JB HI-FI Australia: $5.26 billion
- JB HI-FI New Zealand: NZ$0.22 billion
- The Good Guys: $2.39 billion.
Foolish takeaway
JB Hi-Fi's share price has seen a very strong resurgence since its dramatic dip in early March, rising back to hover around the $43 mark. Shareholders will be hoping that restrictions are not imposed again for it to continue its rise.
