Why JB Hi-Fi (ASX: JBH) surprised its investors today

It isn’t quite reporting season yet, but JB Hi-Fi (ASX: JBH) teased its shareholders with unaudited preliminary results and the company appears to have been given the thumbs-up. But the real question is, will the company’s momentum continue into FY23?

 

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JB Hi-Fi releases unaudited results 

Although a listed company has to have its results audited before declaring them as official figures, companies are allowed to release unaudited results in advance. This is just what JB Hi-Fi, which operates its namesake electronic stores along with the Good Guys, has done this morning. 

For FY22, it generated $9.2bn in sales, $794.6m in EBIT and $544.9m in NPAT. Compared to FY21, these figures represent growth of 3.5%, 6.9% and 7.7% respectively. The company also released individual figures for Q4 which depicted positive sales growth with 11.6% for its Australian franchise and 7.7% for New Zealand.

 

The yield is almost too good to pass up

It has promised to release audited results on 15 August 2022 and to also provide a July sales update. Bear in mind, this news came just two months after the company told shareholders its situation was too uncertain to provide guidance for the full year. And with a dividend yield of 9% last year, you could argue investors are expecting similar this year – with the key difference being that higher dividend yields are more highly valued given inflation. 

 

 

 

Inflation isn’t hitting JB Hi-Fi (yet) 

JB Hi-Fi has enjoyed an unexpected boom in the past couple of years, driven by people setting themselves up to work from home. But the question on investors’ minds is whether or not this will continue as inflation continues to spiral.  

Judging by this morning’s results, it has not been impacted by inflation so far. But investors should watch JBH’s July trading update closely. It is natural that discretionary goods will be more affected by rising inflation than consumer staples.  

Furthermore, JB Hi-Fi (and the electronics and large appliance product category generally) might have a harder landing given the sales boom over the past couple of years. We think it is way too early to say this company has avoided a ‘hard landing’, even though this morning was undoubtedly good news.  

 

 

 

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