We discussed JBH and the retail sector last month here after the Fair Work Commission’s decision to lift minimum and award wages, another headwind for a sector already struggling with rising interest rates and a troubled consumer. JBH isn’t as exposed as some Australian retailers to the housing slowdown, with a decent portion of its goods regarded as must-haves in today’s new technology world, although the tough environment is not good for growth or margins.
The biggest story for JBH over the last 12-months has been valuation compression after being a prominent member of the “Certainty Trade” in 2025; JBH has seen its PE come back to the pack, a logical move with EPS growth set to be ~7% between FY25 and FY27. The May Q3 trading update was broadly solid but fell just short of elevated market expectations, with Australian comparable sales rising +2.6%, slightly below consensus, while New Zealand (+15.2%) and The Good Guys (+2.5%) delivered stronger performances.
- The key disappointment was e&s, where comparable sales fell 4.8%, highlighting ongoing weakness in the housing-linked appliance market and sending the shares down as much as 6.4%, their largest one-day decline since October 2025.
The sticky point, e&s (formerly E&S Trading), is JB Hi-Fi’s premium kitchen and home appliance retail brand, operating as a standalone chain of showrooms primarily in Victoria. It specialises in high-end cooking, refrigeration, dishwashing, and laundry appliances, targeting the renovation and new home build market with premium European brands. By definition, the current housing slowdown post the budget is bad news here, but today may be as bad as it gets, at least this year.
- We are initially targeting the $90 area for JBH, another ~10% higher – we hold JBH in our Active Growth and Income Portfolios.
MM is long and bullish towards JBH
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