JB Hi-Fi -12.31%: delivered a broadly solid FY26 result, with earnings and margins largely in line with expectations and another strong dividend. However, the issue as a slowdown in fourth-quarter momentum and a weak start to FY27, sending the shares lower.
Key results:
- Sales of A$11.06 billion, up 4.8% and slightly below the A$11.12 billion expected.
- Net profit of A$489.9 million, up 5.9% and broadly in line with expectations.
- EBIT of A$734.4 million, up 5.8% and essentially in line with the A$735.8 million expected.
- EBIT margin of 6.64%, modestly ahead of the 6.59% expected.
- Final dividend of A$1.27 per share, up from A$1.05.
The issue was not the FY26 result itself, but the deterioration in trading momentum. JB Hi-Fi Australia comparable sales grew 3.2% for the year, down from 7.2% previously, while The Good Guys slowed to 2.7%. New Zealand remained the standout, with comparable sales up 15.3%.
July trading was softer again. JB Hi-Fi Australia comparable sales fell 1.4%, The Good Guys declined 1.7%, and e&s was down 4.0% on a comparable basis. New Zealand continued to outperform, with comparable sales up 11.7%.
Management noted that customers are becoming increasingly value-conscious and shifting more of their spending toward major promotional events. Technology categories are also being affected by supplier price increases and stock availability, making the near-term sales environment less predictable.
MM’s view: The FY26 numbers were fine, but more recent trading performance has been weak. We’ll need to see how downgraded earnings assumptions flow through over the next 24 hours, before making a call on whether to keep holding the stock. There was some support into weakness today, with the stock largely trading sideways after a sharp leg lower on open.
MM remains long but is cautious toward JBH
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