The JB Hi-Fi Ltd (ASX: JBH) share price is having a strong start to the week.
At the time of writing, the retail giant's shares are up 5% to a record high of $108.08.
This follows the release of the company's half year results before the market open.
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JB Hi-Fi share price jumping on results day
- Total sales up 9.8% to $5.67 billion
- Earnings before interest and tax (EBIT) up 8.6% to $419.9 million
- Net profit after tax (NPAT) up 8% to $285.4 million
- Earnings per share up 8% to 261.1 cents
- Fully franked interim dividend up 7.6% to 170 cents per share
What happened during the half?
For the six months ended 31 December, JB Hi-Fi reported a 9.8% increase in sales to $5.67 billion.
This was driven by a 7.2% increase in JB Hi-Fi Australia sales, a 20% increase in New Zealand sales, and a 9.2% lift in The Good Guys sales. The company also completed the acquisition of e&s on 2 September. It contributed sales of $92.3 million.
Due largely to softer margins in the JB Hi-Fi Australia business, the company's net profit grew at a slightly slower rate of 8% to $285.4 million.
This allowed the JB Hi-Fi board to lift is interim dividend by 7.6% to 170 cents per share. This will be paid to eligible shareholders next month on 7 March.
Commenting on the result, JB Hi-Fi's Group CEO, Terry Smart, said:
We are pleased to report strong sales and earnings for HY25. In this challenging trading environment, marked by heightened competitor activity, our focus remained on maximising demand through delivering consistently high levels of customer service and exceptional value for our customers.
How does this compare to expectations?
It appears that JB Hi-Fi has delivered a result ahead of expectations for the half. This may explain why its share price is pushing higher while the market drops.
Goldman Sachs was expecting the company to report a 7.6% increase in sales and an 8.3% lift in EBIT for the six months. Whereas sales grew 9.8% and EBIT grew 8.6% over the prior corresponding period.
Outlook
The company revealed that it has started the second half in a positive fashion with all businesses recording solid sales growth in January.
JB Hi-Fi Australia sales were up 7.4%, New Zealand sales were up 20.4%, The Good Guys sales were up 6.4%, and e&s sales were up 8.1%.
However, its CEO spoke cautiously about the remainder of the half. Smart said:
Whilst we are pleased to see sales momentum continue into January, we remain cautious given the uncertainty in the retail market and the continued competitive activity. We will continue to adapt and innovate to ensure we remain top of mind as the destination for our categories.
The JB Hi-Fi share price is up 78% over the past 12 months.
