The JB Hi-Fi Limited (ASX: JBH) share price is having a month to forget. Since 30 June, shares in the electronics and home appliance retailer have fallen 6.84%. The S&P/ASX 200 Index (ASX: XJO) is up 0.27% over the same period.
While the company hasn’t made any announcements to the share market since May, and no price-sensitive ones since April, there have been a few goings-on that may be factors playing on the JB Hi-Fi share price movement.
Let’s take a closer look.
Why is the JB Hi-Fi share price underperforming?
The company was coming off a relatively high base at the beginning of the month – so any fall would translate into a higher percentage than investors would usually expect to see.
Analyst Credit Suisse slapped a buy rating on JB Hi-Fi in late April, saying it expected the company’s shares to reach as high as $57.39. The market watchers said the company’s strong March quarter and CEO transition were drivers for its upgraded rating.
Broker notes historically have influenced the share price movements of ASX companies.
So why the sudden fall then?
One answer could be the coronavirus spike currently impacting parts of Australia and sending Sydney into extended lockdown.
Retail has suffered in the past when cities have gone into lockdown. According to recent data from the Australian Bureau of Statistics, 64% of businesses suffered when states have imposed stay-at-home orders to curb the spread of the virus.
As the COVID outbreak in Sydney worsens, we have seen falls not just in the JB Hi-Fi share price, but across the retail sector. Since the end of last month, the Harvey Norman Holdings Limited (ASX: HVN) share price has fallen 3.1%, Premier Investments Limited (ASX: PMV) shares dropped 4.1%, and shares in Super Retail Group Ltd (ASX: SUL) sunk 2.3%.