JBH -4.47%: delivered a steady first-quarter update, broadly in line with expectations, though the underlying message was one of resilience rather than acceleration i.e. a continuation of solid, mature growth rather than anything to excite investors – and when the stock is trading on 24x, it’s easy to understand why the market wanted more…
- Australia: Comparable sales +5% YoY, total sales +6% — steady but unchanged from last year’s pace.
- New Zealand: The standout performer, up +24.3% YoY, rebounding strongly from a weak base.
- The Good Guys: Comparable sales +2.4% YoY, a slowdown from +5% a year ago, reflecting more muted demand for appliances.
- Recently acquired e&s: Sales +4.1%.
Management said trading was “in line with expectations” heading into the key Christmas and Black Friday period.
After several strong years of pandemic-driven growth, JBH is now in a consolidation phase. The business continues to execute well, but the tailwinds that boosted earnings in 2021-23 – stimulus spending, elevated electronics demand, and supply-chain pricing power, have clearly faded.
While execution remains first-class and the balance sheet is in great shape, growth is flattening, and the business is now operating in a tougher consumer environment.
- It’s hard to see material upside in the short term given (still) stretched valuation.
MM is neutral on JBH ~$108
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