JB Hi-Fi (ASX:JBH) share price on watch after announcing results and $250m buyback

This retail giant will be on watch today…

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Key points

  • JB Hi-Fi has released its half year results this morning
  • The retail giant had pre-released its numbers in January, so there were no surprises there
  • But the announcement of a share buyback was a pleasant surprise

The JB Hi-Fi Limited (ASX: JBH) share price will be on watch this morning.

This follows the release of the retail giant's half year results.

JB Hi-Fi share price on watch after announcing share buyback

  • Total sales down 1.6% to $4.86 billion,
  • Online sales up 62.6% to $1.1 billion
  • EBIT down 9.1% to $420.5 million
  • Net profit after tax down 9.4% to $287.9 million
  • Interim dividend of 163 cents per share
  • Capital return of up to $250 million to shareholders by way of an off-market buyback

What happened during the first half?

For the six months ended 31 December, JB Hi-Fi reported a 1.6% decline in total sales to $4.86 billion and a 9.4% reduction in net profit after tax to $287.9 million. However, these numbers won't come as a surprise to investors as they were pre-released to the market in January.

What will come as a pleasant surprise, though, is that management is planning to return all of this profit and more back to shareholders via its interim dividend and an off-market $250 million share buyback. A total of up to $437 million will be returned to shareholders.

In respect to its dividend, JB Hi-Fi is paying investors a fully franked 163 cents per share dividend. This is down 9.4% year on year, which is in line with its earnings decline. Though, as with its sales and earnings, this dividend is up meaningfully on a two-year basis.

JB Hi-Fi Group CEO, Terry Smart, commented: "We are pleased to report strong sales and earnings for HY22. We continued to see elevated demand across all of our sales channels, particularly online which our customers seamlessly transitioned to during the various lockdowns demonstrating the strength and trust in our brands."

Outlook

JB Hi-Fi has started the second half positively, delivering year on year growth across its key businesses during January. This was thanks to heightened customer demand and comes despite battling supply chain and operational disruption as a result of COVID-19.

The release explains that total sales were up 4.3% for JB Hi-Fi Australia and 2.5% for The Good Guys during the month. The performance of the JB Hi-Fi New Zealand business is improving, but its sales still remained down 1.5% year on year in January.

No guidance has been given for the remainder of the second half due to COVID uncertainty.

Mr Smart concluded: "While it remains an uncertain retail environment, we will continue to stay focused on what we can control. Our highly engaging in-store and online shopping experiences delivered by our passionate and knowledgeable team members, and our continued focus on leveraging our scale to deliver great value will ensure we meet our customers' needs during these challenging times."

Motley Fool contributor James Mickleboro 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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