JB Hi-Fi Boss: FY13 Trading "Challenging"
0Overall Score

Terry Smart today described the last financial year ended 30 June as “one of the most demanding ” but admitted 2013 was as “challenging”

Still, JB Hi-Fi enjoyed “record” sales of $3.1 billion iin FY2012, Smart told shareholders today at the company AGM.

However, gross margins (and earnings) did take a hit due to “a combination of the challenging trading environment, more aggressive levels of discounting in the market and increased shrinkage,” JB CEO, Terry Smart said.

FY12 profit slumped 5% to $104.6m year-on-year, the CE retailer announced in August.

The retail boss also said today margins were further impacted by store closures citing WOW Sight & Sound, Dick Smith and Game clearing stock at low prices.

“Trading conditions in FY13 have remained challenging, but are in line with our internal expectations, ” Smart also said.

In the first quarter of FY13, sales grew almost 4%, while comparable store sales were negative 2.4%.

“Gross margin remains in line with last quarter and costs remain well controlled.

“While we expect the outlook to remain challenging for retail, we are confident that we can continue to grow ourmarket share as product innovation continues to drive sales.”

The company is “very well positioned to take advantage of any rebound in consumer spending,” Smart added.

JB expects Apple’s iPhone 5, Microsoft’s Windows 8, the iPad mini and Nintendo’s anticipated Wii U will be the main sales drivers during Christmas trading.

On the future of retail in Oz, JB believe the ingredients to success are “high energy retail” and “innovative digital platforms.”

 

“The future of retail is an integrated customer offer where our unique and high energy retail format, combined with our innovative online and digital platforms, will ensure JB Hi-Fi’s customer proposition is one that our competitors will find difficult to match,” Smart said.

JB Hi-Fi’s online sales grew a whopping 77% in FY12. Unique visitors averaged 927,000 per week in FY12 – up 41% y-o-y.

However, direct online sales remain low at 1.6% of total sales. The site is an important driver of both in store and online transactions, which the company also pointed out in its FY 2012 results statement.

JB Hi-Fi’s Commercial business, which it has expanded further of late, experienced good growth in FY12, with sales up 31.7% driven by continued market share gains.

JB shares rose 1.87% today to $10.33 on the ASX.