JB Hi-Fi shares slump on margin warning

JB Hi Fi Must Be Still Selling A Lot Of Games And Consoles Shannon Grixti

JB Hi Fi Must Be Still Selling A Lot Of Games And Consoles Shannon Grixti

On Monday, the Australian electronics retailer said its net profit was up 37 percent to $151 million for the six months ended 31 December 2017, compared with $110 million for the same period a year ago.

Sales in New Zealand were down 0.4 per cent to $123.6 million and its earnings before interest and tax were zero, compared to $1m previous year, although that was largely weighed down by $5m in lost sales and one-off closure costs.

The figures incorporate financial performances of the companies three main business units, including JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys.

Online sales for JB Hi-Fi rose 41 percent to A$119.3 million in the six-month period, a fraction of total sales which came in at A$2.48 billion.

It also says its New Zealand business suffered from a closure impact of NZD 4.6 million, after the closure of one store and the scrapping of its whitegoods offering in NZ. The segment only contributed 3.4% of total sales for the period.

"Having owned The Good Guys for over 12 months we are now starting to realise the benefits of scale of the combined group and remain excited by the opportunity to grow of of Australia's leading retail brands", JB Hi-Fi's CEO Richard Murray said.

The company has rebranded its four JB Home stores in New Zealand, and closed one home entertainment store, leaving it with 15 JB Hi Fi outlets on this side of the Tasman.

On these results, JB's Australian segment is continuing to perform strongly, though the same can't be said of The Good Guys and the New Zealand business.

However, for the full year the rise profit won't be as large.