Another strong sales report from JB Hi Fi (and its Good Guys offshoot) to go with its surprisingly solid March quarter figures. As a result of the better than expected report the company has reinstated and upped its full-year guidance.
JB Hi-Fi has confirmed that it is surviving the COVID-19 lockdown in fine style, reporting strong comparable sales growth thanks to hundreds of thousands of Australian workers being forced to work remotely or educate their children from their homes.
JB Hi-Fi shorts have been trampled again with the company delivering better than expected interim results and a record dividend after comparable sales grew across all divisions, up 4.4% at the company’s core Australian stores.
Reporting season for Australian companies is around the corner and following that is the reconstitution of RDV’s holdings. RDV’s underlying index is reconstituted twice a year in March and September. This timeline allows consensus forecasts (which feed into the underlying methodology) to be updated after companies report on earnings in February (half-year) and August (full-year).
The surge in demand that occurred in March and April may be underwriting a strong result but Credit Suisse notes significant uncertainty in the outlook as household income and business cash flow declines.
Citi analysts ask the question: Is JB Hi-Fi’s sales growth sustainable? The combination of anticipated slowing in sales growth and the incorporation of The Good Guys only results in minor increases to estimates.