Strong 4Q21 sales update, FY21 headline result ahead BPe

JBH has provided a sales update for 4Q21, and released preliminary unaudited FY21
headline results. The key highlights are as follows:

4Q21 sales update:

  • JB Hi-Fi Australia like-for-like (LFL) sales of -7.8% (cycling +31.4%);
  • The Good Guys LFL sales of -1.5% (cycling +30.2%);
  • JB Hi-Fi NZD (a small contributor to JBH) LFL sales of +46.9% (cycling -24.1%).

Preliminary unaudited FY21 headline results:

  • FY21 sales of $8.9b, +4.6% ahead vs BPe $8.5b and up +12.6% vs pcp;
  • Within this online sales lifted +78.1% to $1.1b, representing 11.9% of total sales;
  • FY21 EBIT of $743.2m, +15.6% ahead vs BPe $642.9m and up +53.8% vs pcp;
  • Strong improvement in gross margins, combined with disciplined cost control and strong sales growth, drove significant operating leverage.

July comments: “…expecting some disruption and variability to sales as a result of the
various state based COVID restrictions”. A July update will be provided on 16 August.

Earnings changes / Investment view: Retain Hold, PT $46.50

The 4Q21 update reveals continued heightened demand for consumer electronics and home appliance/entertainment products. Lockdowns will obviously cause disruption in Jul/Aug, although we note Dec-Quarter trading is the key swing factor for JBH’s 1H22. From a bottom-up perspective, the update further demonstrates: 1) JB Hi-Fi remains a key destination retailer for technology/consumer electronics; & 2) a materially stronger Good Guys business that resonates strongly with consumers for home appliances.

We have updated our FY21 with pre-audit actuals and rolled forward our model. Net effect is our FY21 (now shown as ‘actual’)/FY22e EPS increase by 15%/3.7%. Our PT increases to $46.50 (previously $45.50). Based on valuation on a normalised base and increased near-term uncertainties (as a result of COVID), we retain our Hold rating.

JB Hi Fi - Earnings Forecast

To read the full report click the button below.

View Detailed Report
Authored by Sam Haddad – Analyst – at Bell Potter Securities, 20 July 2021
Important Disclaimer—This may affect your legal rights: Because this document has been prepared without consideration of any specific client’s financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. In the USA and the UK this research is only for institutional investors. It is not for release, publication or distribution in whole or in part to any persons in the two specified countries. This is general investment advice only and does not constitute advice to any person.
Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended.