JBH reported a stellar result yesterday but investors remain very wary of the Australian consumer as interest rates rise and soaring inflation sends the cost of almost everything ever higher thus reducing the disposable cash in people’s pockets i.e. discretionary spending, this has been reflected by consumer confidence slipping back towards GFC levels.
- JBH is on track to deliver record sales for the 2022 fiscal year aided by a 50% jump in online sales.
- Shoppers have also returned to their stores post-Covid helping send revenue up 3.5% over the year to $9.3bn.
- The company said NPAT would rise 7.7% to $544.9mn for the last FY, a major beat to expectations.
However, it was interesting to see this cracker of a result only send the stock up +2.2% on the day as the retailer failed to provide an outlook for next year – who can blame them in today’s world! We like this company and while the sector may not yet be out of the woods, as we often say, stocks tend to bottom before the fundamentals really tick up. JBH is one of our preferred stocks to re-enter the Retail Sector at some point.
- Earnings upgrades are already flowing through with UBS increasing by ~13% over the next 2-years, it will be very interesting if these moves can outweigh the market’s concerns around the consumer.
MM likes JBH around $35
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