Why the JB Hi-Fi (ASX:JBH) share price is down 7% today

The JB Hi-Fi share price is down 7.53% in late afternoon trading, while the ASX 200 is up. Here's why investors are selling.

The JB Hi-Fi Limited (ASX: JBH) share price is down 7.53% to $46.40 in late afternoon trading.

That's heading in the opposite direction of the broader S&P/ASX 200 Index (ASX: XJO), which is up 0.5% at this same time.

Two men react in shock at Evolution share price drop record profit

Image source: Getty Images

What does JB Hi-Fi do?

JB Hi-Fi is a consumer goods retailer. The company's products include a range of home entertainment, gaming, music and IT products as well as white goods and home appliances. The company has made several acquisitions over the years, including acquiring The Good Guys in 2016. It has also been actively expanding its online presence.

JB Hi-Fi has more than 300 stores across Australia and New Zealand. The company also operates online stores in both markets. JB Hi-Fi first began trading on the ASX in 2003.

Why is the JB Hi-Fi share price down today?

Shareholders in JB Hi-Fi have enjoyed a banner year, especially relative to the wider market.

While the ASX 200 is still down 5% since 2 January, the JB Hi-Fi share price is up 23%, even after today's losses. And that gain comes despite shares getting ravaged by COVID-19 alongside most of the rest of the market, falling 47% from 10 February through to 25 March.

But in late March, JB Hi-Fi began to benefit from some wider trends impacting share markets.

With Aussies suddenly finding themselves working, shopping and socialising from home, demand grew for JB Hi-Fi's large selection of consumer electronic goods and white goods, among others items.

The company also benefited from its large online footprint (it could make sales without people coming in-store), as well as government income support measures that put more money into consumers' pockets.

And the JB Hi-Fi share price reflected this, rocketing 123% higher from the 25 March low to the all-time high of $52.40 per share on 25 August.

But last night's coronavirus vaccine announcement from Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) looks to have stolen some of the tailwinds helping drive JB Hi-Fi, and indeed many ASX 200 tech shares, to new highs.

If the vaccine proves to effectively prevent more than 90% of symptomatic infections, as is hoped, it could see the end of expanded government income support measures. Even as people return to working from the office, shopping in brick and mortar locations, and socialising face to face.

That potential reality is still some ways off.

But judging by the falling JB Hi-Fi share price – and indeed the wider tech share selloff that's sent the S&P/ASX All Technology Index (ASX: XTX) down 5% today – the market is optimistic that the year of the pandemic may soon be relegated to history.

Motley Fool contributor Bernd Struben 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.

More on ASX Share Market News

A youthful man looks up thoughtfully at a light bulb above his head.
52-Week Highs

APA Group, QBE Insurance, Woolworths shares reach 52-week highs: Is there any upside left?

Here’s what the experts think.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Broker Notes

Analysts tip these ASX shares to return 20% to 50%

Big returns are expected from these shares.

Read more »

Wooden house and golden coins on balancing scale.
Broker Notes

How much does Morgan Stanley think your house price will fall?

A real estate recovery is a long way off, the broker says.

Read more »

Happy businessman fist pumping while looking at a tablet.
Broker Notes

A leading broker just upgraded these 3 ASX shares

Morgans is feeling more positive about these shares.

Read more »

Businessman at his desk, looking seriously at information on his digital tablet.
ASX Share Market News

5 things to watch on the ASX 200 on Thursday

Here's what to expect on the local market today.

Read more »

Four miners discussing with each other next to mining machinery.
Broker Notes

Why are these 8 ASX rare earths companies rated a buy?

Technology is driving strong uptake of rare earths, which are in short supply.

Read more »

An old-fashioned panel of judges each holding a card with the number 10
Share Gainers

Here are the top 10 ASX 200 shares today

It was a volatile, but successful, day for investors.

Read more »

A woman in a red dress holding up a red graph.
Broker Notes

Bell Potter has tipped these ASX small caps to almost double in value

Big things could lie ahead for these two very different companies.

Read more »