JB Hi-Fi (ASX:JBH) share price shoots 7% higher on ‘strong sales’

The company’s shares are on the move this Tuesday morning.

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Key Points

  • The JB Hi-Fi share price surges 7.33% in early morning trade
  • The company’s sales increased following heightened customer demand
  • Net profit is down 9.4% versus H1 FY21

The JB Hi-Fi Ltd (ASX: JBH) share price is racing higher today following a trading update from the company.

At the time of writing, the retailer’s shares are swapping hands for $50.06, up 7.33%.

JB Hi-Fi continues sales momentum in FY22

Investors are buying up JB Hi-Fi shares after the company highlighted sales growth for the second quarter of FY22.

For the 3-month period ending 31 December 2021, the group achieved a double-digit increase in sales across its businesses.

JB Hi-Fi Australia experienced a 23.1% lift in sales volumes when compared against the prior corresponding period (Q2 FY20).

Meanwhile, JB Hi-Fi New Zealand and the Good Guys realised a 12.8% and 26.2% improvement in sales, respectively.

Sales momentum continued throughout the second quarter for JB Hi-Fi, with heightened customer demand for consumer electronics and home appliances products.

When looking at the first half of FY22, preliminary unaudited total sales came to $4.86 billion. This reflected a fall of 1.6% on H1 FY21, but an increase of 21.7% compared to the first half of FY20.

Online sales grew 62.6% to $1.1 billion, or 22.7% of total sales, underpinned by growth categories across the retailer’s portfolio. This included communications, computers, games hardware, visual, and small appliances.

Earnings Before Interest and Tax (EBIT) sunk 9.1% to $420.5 million on last year’s result but surged 59.5% over a 2-year period. JB Hi-Fi stated that this was driven by elevated sales growth, management of gross margins, and disciplined cost control.

On the company’s bottom line, net profit after tax (NPAT) dipped to $287.9 million, a decline of 9.4% versus H1 FY21. In contrast, NPAT jumped 68.8% against the first half of FY20’s financial results.

JB Hi-Fi group CEO Terry Smart touched on the results, saying:

We are pleased to report strong sales and earnings for HY22. In challenging circumstances, we have again demonstrated our ability to adapt and respond to meet the strong demand from our customers, both in-store and online.

The company will release its audited half-year results for the 2022 financial year on 14 February.

JB Hi-Fi share price snapshot

Over the past 12 months, the JB Hi-Fi share price has gone somewhat on a rollercoaster ride, down 11.5%. This is a stark contrast from when its shares were on a steep growth trajectory from March 2020 to August 2020.

On valuation grounds, JB Hi-Fi commands a market capitalisation of roughly $5.36 billion, with approximately 114.88 million shares on hand.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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