JB Hi-Fi Is Raking It In After Dick Smith's Demise

JB Hi-Fi Software Sales Decline Once AgainImage: iStock

JB Hi-Fi's has announced record financial results for the first half of its 2017 financial year. Total sales were up by 23.6%, reaching $2.6 billion and net profit jumped by 21.7% to $124.4 million. The downfall of Dick Smith Electronics helped boost JB Hi-Fi's results. Read on for more details.

The financial results reflected earnings from both Australia and New Zealand; there are 302 JB Hi-Fi stores across both countries. It also included results from The Good Guys, which was acquired by JB Hi-Fi last year. While sales in New Zealand were down by 1.7% to NZ$125.1 million, Australia's results more than made up for the loss. Here are some key highlights from JB Hi-Fi's overall financial results from June to December 2016:

  • Total sales were up by 23.6% to $2.6 billion
  • Underlying earnings before interest and tax (EBIT) was up by 30.9% to $180.8 million
  • Underlying net profit after tax (NPAT) was up by 31.7% to $125.4 million

For Australia:

  • Gross profit increased by 13.2% to $496.5 million with gross margin at 22.2%
  • Cost of doing business (CODB) went down to 13.9%, largely due to the sale of the business.
  • Online sales grew by 40.4% to $84.8 million, accounting for 3.8% of total sales.

The strong results were partly attributed to the demise of Dick Smith Electronics (DSE) during 2016:

"As previously highlighted, the closure of DSE during the second half of FY16 has contributed to an increase in JB HI-FI sales in the first half of FY17; however the impact will moderate as we cycle through their decline and eventual market exit."

The key growth categories in terms of sales for JB Hi-Fi were:

  • Communications (think mobile phones)
  • Audio
  • Cameras
  • Accessories
  • Computers
  • Home appliance

The home appliance category reflects JB Hi-Fi's acquisition of The Good Guys as part of the company's strategy to make a mark in the home goods department. The acquisition was completed in November last year.

In Australia, hardware and service sales were strong, jumping by 15.8%. Software sales - on the other hand - declined once again, this time by 9.4%. In the last financial year, software sales were already down by 5.4%, driven by the trend towards digital media distribution such as Netflix, Spotify and Steam.

JB Hi-Fi expects total sales figures to be around $5.58 billion and NPAT to be between $200-$206 million by the end of the current financial year.

Dick Smith Is A Sad Wasteland Of Defeat And Broken Dreams

'.The Dick Smith of my childhood was a magical place. Gazing with wide eyes at the gadgets and gizmos around me, I was resigned to never owning them but found satisfaction in looking and dreaming. The store that I visited this week was a pit of despair and humiliation, as consumers picked the bones of the carcass and workers faced the end with resigned apathy..'

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Comments

    Who is the main competitor for JB Hifi now? Can't be good if there isn't any.

    Spandas Lui.......Kogan bought Dick Smith, what's the big deal with the article because no-one is dumb enough to think that Dick Smith was "the best place to buy".....in fact THE WORST in recent times.
    My wife's mums 18 month old CRAPPY Dick Smith TV can't be fixed.....so don't write articles on subjects of which you know NOTHING.
    The Good Guys, Harvey Norman, JB HiFi , OfficeWorks, Bing Lee, On-line Ebay stores are all alive and well......why push JB HiFi.......highly overpriced products compared to Harvey and Good Guys.
    Sitting under a tree with a lap-top is the worst way to learn what the REAL WORLD has to offer!

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