Retail giant JB Hi-Fi has shrugged off the poor economy to record a first-half net profit of $59.04 million, up 40.8% on the previous corresponding period, and says the year ahead will be just as good.
Revenue for the six months ending 31 December rose 27.6% to $1.6 billion and the company says 2009 has started well, with sales in January and February meeting internal expectations.
The group opened 14 new stores in the first half, and plans to open seven in the next six months.
“Whilst the retail outlook is less certain than previous reporting dates, the company is cautiously optimistic that it will have another strong year and confirms its previous guidance that sales will be circa $2.35 billion or a 28% increase on the prior financial year,” the company says.
Store growth for the period was 11.1%, while margins remained at 21.4%. Chief executive Richard Uechtritz is understandably happy with the company’s performance, given the deteriorating economy.
“We are extremely pleased with this very strong result, having traded well during what is considered to be the weakest economic climate for many years. JB has proven to be resilient during this tough period, with home entertainment becoming more of a staple category.”
Uechtritz also says the results are evidence of the retailer’s sound internal practices.
“The overall matter is, it’s just good retailing,” he says. “It’s our focus on costs, that is having a low-cost retail model, ensuring we have the right products at the right prices, and asking whether we have the good staff to sell the products. We make sure we look at our stores, and all those other things a retailer should do. Obviously, at the moment we’re doing them.”
Uechtritz also played down the rumours of price increases due to the fall in the Aussie dollar.
“There’s been some price increases, but nothing of substance. Some LCD panel price rises have come through from Sony, LG and Panasonic, but we’re talking single digit rises here, and in any case, these will be beneficial to retailers like us.”
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
