JB Hi-Fi FY24 Earnings Call Highlights

JB Hi-Fi (ASX: JBH) shares rallied to all-time highs on Monday after reporting a better-than-expected set of FY24 numbers plus an special 80 cents per share special dividend.

FY24 Earnings Highlights

• Total sales down 0.4% to $9.59bn

• Net profit after tax down 16.4% to $438.8mn but 3.7% ahead of consensus

• Earnings per share down 16.4% to 401.4 cents

• Final dividend down 10.4% to 103 cents per share

• Full-year ordinary dividend down 16.3% to $2.61 per share but:

• A special dividend of 80 cents per share fully franked

• Has also entered into an agreement to acquire E&S Trading Co, with an initial acquisition of 75% for $47.8m cash

Earnings Call Highlights

Dividend and capital management: "The combined final dividend and special dividend will distribute AUD 200 million to shareholders, while continuing to provide the group with balance sheet capacity to invest in organic and inorganic opportunities." – CFO Nick Wells

E&S Acquisition: "Established in 1962 by the Sinclair family, a premium offering across kitchen, laundry, and bathroom product segments. 10 showrooms in Victoria plus 1 showroom in ACT to open this month ... FY24 revenue of circa $230 million and normalised pre-AASB16 EBTIDA of circa $7 million." – CEO Terry Smart

Electronics and category trends: "The key growth categories for mobile phones, we saw growth from Apple with our promotional activity and supported by good stock levels of existing sales run rate." – CEO Terry Smart

More on category trends: "Small appliances, good growth driven by range of brand expansion combined with improved in-store execution ... Games hardware, good growth in console and associated accessory, including the successful launch of new handheld gaming devices." – CEO Terry Smart

Promotional activity: "Sales driven by continued customer demand for technology and consumer electronic products and supported by well-executed and successful Black Friday, Boxing Day and Tax Time promotional periods." – CEO Terry Smart

Cost management: "Cost of doing business was 12.6%, up 54 basis points and in absolute terms grew 5.5% with disciplined cost controls helping to manage inflationary cost pressures." (for JB Hi-Fi Australia) – CEO Terry Smart

Analyst Q&A Highlights

Michael Simotas from Jefferies about promotional activity in July compared to the past/pandemic: "I don't think so. It's just the same as any month. When it's tough, you go out, you work with suppliers, you know, and create promotions that are going to drive sales."

David Errington from Bank of America re category performance and drivers: "Things like TV was quite soft, but the tech categories continue to perform strongly. And again, that just comes down to ... a lot less discretionary, those categories are becoming like mobile phone."

Craig Woolford MST Marquee re average selling price or average transaction value throughout FY24: "It's quite – when you think of an average transaction in tech, it was – for JB it was actually slightly up and volume was slightly down so it's not too dramatic, but ASP has held up and that's more to do with the mix of the products that are going through than the individual categories."

Phillip Kimber from Evans & Partners re consumer behaviour: "No doubt with cycling, no. Some lower comps from the year before I think is assisting as far as that is concerned. So, there's no doubt, though, that we had a really solid tax time promotional period. Again, consumers are really reacting to that discounting. However, that last quarter into July, it's with the cycling, less challenging comps as well."

This article was generated with the support of AI and reviewed by an editor.