The Good Guys drive a good beat in the JB HiFi (ASX: JBH) result

Stock

JB HiFi (ASX: JBH) $23.45 as at 11/02/2019

Event

JB Hi-Fi is the first cab off the ranks for the big retail names, releasing their first half numbers this morning. The result is slightly better than expected, and although it contained some downbeat commentary, it was not the car crash the market had feared.

The big surprise in the result was the performance of the Good Guys, the business that has been a big drag on JBH results for the past few years. The GG’s printed sales growth of 1.5% while margins actually expanded, although off a low base. The NZ operations also saw some improvement, although JBH NZ is a small portion of the group’s profit.

Outlook was mixed, however few in the market are positive Australian retail, so it looks a better than expected outlook. January has seen some slowing sales yet guidance for the full year was at worst in line with expectations. JB is looking at full year profit of  $237-$245m vs consensus of $239.6M at the lower end.

Overall, the group profit rose over 5% on the first half of FY18, the dividend grew 6%, guidance was slightly better and the stock has rallied over 3% today as a result.

JB HiFi (ASX: JBH) Chart

Market Matters Take/Outlook

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