No surprises from JB Hi-Fi first-half earnings, $250m buy-back announced

Investors should know exactly what to expect from JB Hi-Fi (ASX: JBH) after everything was laid out in a first-half sales update on 18 January.

There was very little discrepancy between the unaudited sales update and today’s official figures. 

Financials at a glance: 

• Sales of $4.86bn, down -1.6% 

• Net profit of $287.9m, down -9.4% 

• Interim dividend of $1.63 per share, down -9.4%

• Off-market buy-back of up to $250m 

The interim dividend represents 65% of net profits and a yield of 3.3% based on today’s open price ($50.00). JB Hi-Fi shares go ex-dividend on Thursday, 24 February.  

Leading into today’s results, Morgans said that the pre-announced first-half sales was only down -1.6% year-on-year, with “continued heightened customer demand for both consumer electronics and home appliance products’ evident.” 

Potential upside drivers from today's earnings include:

Online sales momentum intact 

JB Hi-Fi continued to invest in its online presence and supply chain, including upgrades to its website, distribution centres and delivery options. 

Online sales for the Group grew by 62.6% to $1.1bn, representing 22.7% of total sales. 

“We are pleased to report strong sales and earnings for HY22. We continued to see elevated demand across all of our sales channels, particularly online which our customers seamlessly transitioned to during the various lockdowns demonstrating the strength and trust in our brands,” CEO Terry Smart said. 

Off-market buy-back

JB Hi-Fi had an outsized closing cash position of $844.5m at 31 December.  

The Board decided that an off-market buy-back was the most efficient and value enhancing way of returning capital to shareholders. 

With less shares on issue, metrics like earnings per share and return on equity is expected to improve.

The buy-back’s ex-entitlement date will be on Wednesday, 23 February. 

The Buy-back is expected to be paid to shareholders by 20 April. 

FY22 outlook

Sales so far in the second-half continued to reflect a heightened level of customer demand. Comparable sales growth for the month of January include:

• JB Hi-Fi Australia 3.6%  

• JB Hi-Fi New Zealand -1.8% 

• The Good Guys +1.9%

JB Hi-Fi fails to breakout

JB Hi-Fi shares rallied 7.5% after open, straight into its longstanding resistance area of around $52.80.

Investors were clearly selling into strength, with fading to a gain of 4.4% at noon.

JB Hi-Fi share price chart, TradingView