Online Proves A Winner For Dick Smith
Online sales is proving a bonanza for consumer electronics group Dick Smith who today reported a 116 percent jump in sales. The company is competing head on with the likes of JB Hi Fi, Kogan and the likes of Big Brown Box.
Hard hit is Harvey Norman, who are still struggling to get a competitive online website operational in Australia.
Parent company Woolworths is continuing investment in this rapidly growing channel to drive incremental sales and profitability. Total online sales were up 59 percent for the company.
Overall, Dick Smith’s sales were maintained at last year’s levels and a 2 year CAGR sales increase of 6.1 percent, with the bulk of these sales coming from new store openings.
Sales in the new Australian format increased 15 percent for the year with 42 percent of stores repositioned to the new offer. The remaining 58 percent were affected by negative factors including lower consumer confidence, increased competition and the lack of Government stimulus.
However, while repositioning was underway, the consumer electronics division experienced a challenging second half with Earnings Before Interest and Tax (EBIT) 45 percent below last year.
However sales in consumer electronics were buoyed by Woolworths’ continued investment in India with overall sales of $252M during the year and EBIT of $1.3M, a huge jump from its $4.3M loss last year. The company has grown its venture with TATA by a further 17 stores, bringing the total to 50.
Overall Woolworths reported a full year net profit of 10.1 percent and expects to post net profits of between 8-11 percent in 2011.