Lockdown demand sees JB Hi-Fi bag $300m profit
The divide between retail's coronavirus lockdown winners and losers has been dramatically highlighted as JB Hi-Fi becomes the latest major chain to issue a bumper trading update.
The electronics and whitegoods heavyweight said it was on track to deliver a record full-year sales and profit haul amid a surge in demand for work-from-home equipment and entertainment devices.
The update from the retail group, which owns The Good Guys, comes after rival Harvey Norman reported a double-digit sales surge amid the lockdown.
Bunnings, Officeworks Kmart and the nation's two major grocery chains have also experienced major sales bumps.
The big-box chains all kept their doors open during the lockdown - introducing social distancing, and extra hygiene and cleaning measures - and provide a range of goods for which demand surged amid stay-at-home directives.
Their coronavirus experience stands in stark contrast to that of other key retail segments such as fashion, which suffered a marked drop-off in demand, and where social distancing requirements in smaller stores made it impractical to keep chains open.
Like-for-like sales at JB Hi-Fi's Australian stores were up 20 per cent for the five months to May compared with the same period a year earlier, the retailer said on Thursday.
That compares with 4.4 per cent growth in the six months to December.
The like-for-like measure strips out the impact of stores opening or closing.
Like-for-like sales at The Good Guys were up 23.5 per cent, against a 0.6 per cent rise in the first half of the financial year.
JB Hi-Fi now expects group sales to hit a record $7.86 billion this financial year, up from $7.1 billion in 2018-19 and a target of $7.33 billion issued with its first-half result in February.
It expects to deliver a full-year net profit in the range of $300 million to $305 million - an increase of 20 per cent to 22 per cent on its result last financial year.
Chief executive Richard Murray said the retail group had adapted quickly and successfully to the "extraordinary challenges" thrown up by COVID-19.
"Our customers have continued to turn to us for their technology and home-appliance needs, and our team members have responded and adapted in an amazing manner to make sure we can do it safely and effectively," he said.
But the Melbourne-based retail heavyweight did not escape the pandemic completely unscathed.
Like-for-like sales at its New Zealand stores for the five months to May fell 19.3 per cent and it will write down the value of its Kiwi business by $25 million at its full-year results.
All New Zealand stores are now open and early sales performance since reopening had been solid, the company said.
Shares in the group dipped 4.3 per cent on Thursday to close at $40.22 as the broader market fell.
On Wednesday, Harvey Norman reported a 17.5 per cent jump in sales from its Australian franchisee stores for the first five months of the year - a result far stronger than analysts had forecast.
Meanwhile, shares in online retailer Kogan jumped 6.9 per cent on Thursday to close at $13.23 as they returned to trade after the group tapped investors for $100 million to fund growth opportunities.
Originally published as Lockdown demand sees JB Hi-Fi bag $300m profit