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JB Hi-Fi (ASX:JBH) top dog Nick Wells said on Monday that while the Australian company did see sales growth across the half year (both at its flagship store and Good Guys stores), “we remain cautious given the uncertainty in the retail market and the continued competitive activity.”
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That sounds a lot like not-exactly-confident guidance into 2HFY26 and beyond, but perhaps uncharacteristically, investors weren’t bothered. JB Hi-Fi jumped +7.5% and, heading into the arvo, had seen $53.7M worth of shares trade hands.
A $2.10 dividend payment also helps, of course – 23% fatter than vs pcp – which is in line with JB Hi-Fi’s move to increase its divvy payout ratio to “a range of 70-80% of NPAT.” That sounds pretty good on paper, and might be enough to make investors forget that the stock is at a 16-month-low.
It is worth noting, though, that the response could be seen as ebullient. Continued competition against JB Hi-Fi is a way of saying Harvey Norman, yes, but it’s also another way of saying Amazon as well. The market appears to have discounted management commentary, which was – it’s fair to say this – buried at the bottom of the company’s Monday results announcement.
What is perhaps more interesting about the company’s half-year earnings is that it points towards an apparently unkillable beast: The Aussie consumer.
Sales jumped in the first half over +7% vs pcp to A$6.1B while NPAT jumped +7% too, to $305.8M. The overall margin increased by 11bps, and that $2.10/sh dividend is a divvy payment 23% higher than the previous period.
Strong execution around promo sales (the word execution was used a lot by JBH on Monday) was pointed to as a reason for stronger sales, but it didn’t appear that Australian consumers had run on the store on Boxing Day alone; though, it was noted that consumers continue to look for value.
Still, they also continue to look for discretionary electronic entertainment products, which doesn’t scream an epidemic of lower household savings budgets.
If the company were a government department, we could probably get an idea of the breakdown per customer occupation, but it’s probable that the FIFO boys still like TVs and gym-faring women still like fitness tech.
As for the Good Guys? Vacuum cleaners, fridges, and all the usual there. No real surprises, but no evidence of a crippled consumer, either. Unless you look at crisis hotline engagement data, of course.
JBH last traded at $82.46/sh today.
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