Why the JB Hi-Fi (ASX:JBH) share price surged 19% in March

The JB Hi-Fi Limited (ASX: JBH) share price surged higher in March as broader investor sentiment pushed the electronics share higher.

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The JB Hi-Fi Limited (ASX: JBH) share price was on fire in March. Shares in the Aussie electronics retailer soared 19.3% higher to close the month at $51.10

Why the JB Hi-Fi share price soared higher in March

The S&P/ASX 200 Index (ASX: XJO) finished the month on a strong note as JB Hi-Fi announced a new partnership with Zip Co Ltd (ASX: Z1P). Zip will provide a fully integrated payments solution for both JB Hi-Fi and The Good Guys stores.

The JB Hi-Fi share price managed to surge higher throughout the month as a strong corporate earnings season continued the momentum into March. 

JB Hi-Fi itself had a strong half-year results release on February 15. For the six months ended 31 December 2020, JB Hi-Fi reported a 23.7% jump in sales to $4.9 billion. Online sales surged a whopping 161.7% to $678.8 million as Aussies spent big despite lockdowns in parts of the country.

JB Hi-Fi Australia reported a 23.3% increase in sales to $3.36 billion. That, coupled with strong results in New Zealand and The Good Guys segments, boosted overall sales and profit.

Earnings before interest and tax (EBIT) climbed 76% to $462.8 million with an 86.2% increase in net profit to $317.7 million.

The JB Hi-Fi share price actually slid 17.2% in the two weeks following the result. However, a large portion of that can be attributed to shares trading ex-dividend on 25 February. That $1.80 per share interim dividend pushed the shares lower to end the month.

Stronger investor sentiment, however, pushed ASX 200 shares like JB Hi-Fi higher in March. That included fellow ASX retail share Super Retail Group Ltd (ASX: SUL) climbing 7.0% higher in March.

It wasn’t all good news for investors in Aussie retailers last month as electronics retailer and JB Hi-Fi competitor Kogan.com Ltd (ASX: KGN) shed 7.6% last month.

Foolish takeaway

The JB Hi-Fi share price surged higher last month despite no new ASX announcements from the ASX 200 retailer. Stronger investor optimism and a significant earnings boost helped propel the Aussie electronics retailer’s shares higher to close out the month.

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Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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