JB Hi-Fi sees green shoots after sales plunged during the lockdowns

Electronics and consumer goods chain JB Hi-Fi has seen its sales plunge in the September quarter as it weathered the extended lockdowns in Sydney and Melbourne, though its chief executive says conditions have improved this month.

At its annual general meeting on Thursday, recently appointed CEO Terry Smart told shareholders the company’s Australian stores had seen sales fall 7.9 per cent for the three months to the end of September, the first quarter of its financial year. The situation was slightly better in New Zealand, where sales dropped 6.4 per cent, and at whitegoods retailer The Good Guys, which experienced a 6.1 per cent sales decline for the period.

JB Hi-Fi Group chief executive Terry Smart says sales are improving in October.Credit:

JB Hi-Fi has long been a major beneficiary of the pandemic, due to stimulus-fuelled spending and a boom in demand for home office equipment as people were forced to work from home. However, the recent extended lockdowns across Sydney and Melbourne have forced the company to largely shut its stores, bar for click and collect and essential shopping.

The business is also comparing its sales against the same time last year when business was still booming, with JB reporting a massive 27 per cent sales growth for the first quarter of last financial year.

Over a two-year period, which compares the latest result to fiscal 2020 before the start of the pandemic, JB’s Australian sales grew 17.3 per cent and The Good Guys’ rose 22.9 per cent.

Mr Smart said the two-year growth rate showed the business was still seeing heightened customer demand, and that sales have started to improve this month.

“In October, we have seen sales momentum continue and have benefitted from the re-opening of stores in NSW and changes to the timing of key product releases versus prior years,” he said.

“While the start to this year has been significantly impacted by COVID-19 restrictions and in some states extended periods of store closures, we have demonstrated our ability to adapt and respond to continue to meet the strong demand from our customers.”

Mr Smart said the company was confident heading into the crucial Christmas trading period thanks to its “quality store locations and our established online offerings”.

Shares in the business traded 1.2 per cent higher at $47.46 on Thursday morning.

More to come.

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