Consumer electronics retailer JB Hi Fi has defied the market by reporting a bumper 40% increase in profits and a sales increase of 28%. The Company also believes that the CE industry at large will benefit from further Federal Government stimulus packages.
As a Reserve Bank board member called for a change in the way that the stimulus package is distributed in an effort to prevent consumers spending on what they described yesterday to a Senate hearing as “Plasma & Pokies”, JB HI Fi has said that sales in January and February are as forecast.
One JB Hi Fi Manager said “We are definitely benefiting from the money that was handed out in December. This has certainly helped our sales.”
During the past six months as Harvey Norman was closing stores JB Hi Fi has opened 14 stores during and will open a further seven stores in the second half. They are also looking at new locations following the collapse of several retailers, said Richard Uechtritz during a recent interview with ChannelNews.
Uechtritz said, “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 per cent increase on the prior financial year.”
Store growth rose 11.1 per cent across its regions and management said margins remained stable at 21.4 per cent despite discounting at its competitors.
The tough economic environment for the retail sector will present expansion opportunities, the company said.
“The weak retail climate should throw up expansion opportunities,” Mr Uechtritz said during a teleconference.
“Sites from companies like Crazy Clark’s and Go-Lo are possibilities and some pass down sales that would have otherwise gone to the Strathfield business upon closure of those stores.”
The company renewed its debt facilities in December for another three years and said it had an ability to take advantage of any attractive growth opportunities that may arise in the current weak economic climate.