JB Hi-Fi sales slow as NZ turnaround begins
JB Hi-Fi has recorded significantly lower sales on the prior corresponding period (pcp) in the first weeks of FY18 trading, outlining an expectation that the market will remain competitive heading into the Christmas trading period.
In a trading update delivered at its Annual General Meeting on Thursday, JB Hi-Fi advised that year-to-date sales growth to October 22 was 6.2 per cent, down from 14.3 per cent in the pcp.
Comparable sales growth for JB Hi-Fi was 3.2 per cent, down from 10 per cent in the pcp, while The Good Guys booked 3.1 per cent total sales growth and 2.4 per cent comparable sales growth.
Sales moderated in September and October due to changes in the timing of “key product releases” from last year, which the company said had elevated sales growth in the pcp.
“[We] expect the market to remain competitive as retailers drive for market share in the lead up to the key Christmas period,” the company said on Thursday.
“In JB Hi-Fi and The Good Guys, we believe we have to unique and relevant brands, particularly in the eyes of our customers … we are confident we will maintain our market leading competitive position.”
JB Hi-Fi Group CEO Richard Murray told investors at the AGM that since Terry Smart had been appointed as managing director of The Good Guys in April a variety of positive changes had been made to the business.
This has reflected in TGG’s year-to-date trading, which is well up on the 1.3 per cent decline in comparable sales that JB Group booked for the business between November 2016 and June 2017.
Murray reiterated his confidence in JB’s prospects against incoming competitors like Amazon, saying the strategy that’s been adopted to deal with the changing retail landscape has been extensively researched.
“We have engaged and researched internationally and have challenged our current and future strategies, particularly as they relate to new competitors,” Murray said.
“From price intelligence and benchmarking, delivery and fulfilment capability, digital infrastructure to customer experience, we have undertaken detailed analysis and planning and are confident in our go to market plans.”
Murray also signalled that the first stages on his turnaround of NZ operations, which he called out at the full-year result in August, are underway, with the launch of a new e-commerce website.