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Is JB Hi-Fi the best retailer in Australia?


JB Hi-Fi Limited (ASX: JBH) posted another positive trading update on Thursday revealing operating leverage and sales growth.

The update was given to fully inform the market before the company closed applications for its previously announced $250 million buyback on April 8.

JB Hi-Fi will return some of its $844 million war chest to shareholders by purchasing up to 5% of its share capital.

  • This comes after returning an additional $187 million to shareholders via dividends in February.

    Record sales. Record margins. Dividends. Buybacks.

    This begs the question, is JB Hi-Fi (ASX: JBH) the best retailer in the ASX 200?

    What did JB Hi-Fi announce?

    JB Hi-Fi has continued its strong trading momentum across all divisions. From January 1 to March 23:

    • JB Hi-Fi Australia grew sales 10.5%
    • JB Hi-Fi NZ increased sales 2.9%
    • The Good Guys recorded 5.1% growth

    For the full financial year, the business has achieved 0.9% and 0.5% growth across JB Hi-Fi Australia and The Good Guys.

    This was offset by a 2.5% decline in JB Hi-Fi NZ.

    Management noted customer demand continued, resulting in strong sales growth.

    “…sales growth, combined with disciplined cost control, and stock availability and sales mix benefits in gross margins, particularly in The Good Guys, drove strong operating leverage across the Group”

    The once temporary COVID-19 bump has turned permanent for JB Hi-Fi.

    Even with restrictions largely removed, shoppers are still spending big on electronics and appliances.

    Despite just over three months remaining for FY22, management did not provide guidance.

    Is JB Hi-Fi the best retailer in the ASX 200?

    JB Hi-Fi has been one of few retailers and for that matter ASX 200 companies, that have maintained the COVID-19 bump to sales and earnings.

    Other retailers simply haven’t been able to keep up.

    Kogan.com Ltd (ASX: KGN) has seen its sales growth reverse once removing acquisitions.

    Meanwhile, Temple & Webster Group Ltd (ASX: TPW) revenue growth has failed to drop to the bottom line.

    Traditional retailers Accent Group Ltd (ASX: AX1) and Super Retail Group Ltd (ASX: SUL) have had their profits fall off a cliff.

    Premier Investments Limited (ASX: PMV), which owns Smiggle and Peter Alexander, is the only retailer to keep up.

    But even they acknowledge how good JB Hi-Fi is. In fact, Premier poached JB’s CEO last year to run the business.

    The market has been saying eventually the growth will drop off.

    But it looks more likely JB Hi-Fi will be able to maintain its momentum and prove itself to be the best ASX 200 retailer.

    Information warning: The information in this article was published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169

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