Retail giant, JB Hi-Fi, has reported a record net profit of $87.9 million, up 15.6 per cent for the half-year ending December 31.
The retailer claimed the diversity of its product offerings helped absorb a reduction in sales, which experienced an 8 per cent increase to $1.68 billion.
This is despite comparable store sales growth decrease of 1.5 per cent for the period.
“Our sales growth of 8.3 per cent was pleasing given the significant price deflation experienced particularly with in flat panel TVs and the decline in games, which was driven by the lower sales of Nintendo Wii, Nintendo DS and Sony PSP off the strong growth last year,” JB Hi-Fi CEO, Terry Smart, said in a statement to the ASX.
Earning before tax reached $127 million for the half-year, up 14 per cent compared to the previous period.
During the first half of the year, the retailer opened 13 new stores – 10 in Australia and three in New Zealand.
It has plans in place to open five more outlets in the second half of the year, bringing the total number of new stores to 18.
The retailer anticipates the new stores, along with its other 42 outlets there were opened during the past two financial years, will continue to drive solid revenue and earnings growth.
All up, JB has 153 stores with 140 in Australia and 13 in New Zealand.
It plans to open 15 stores per annum to reach its 210 – store goal.
The retailer also plans to continue to develop its online presence. Online sales grew 35 per cent during the half year, but JB claimed online sales only contributed a small portion to its total sales.
The retailer indicated sales in the first five weeks of trading in the second half of the year were challenging as consumer spending remained subdued.
“Sales since the start of January have remained tight as high levels of discounting and the impact of price deflation continued. While we anticipate a volatile and competitive market in the second half, we are confident that the JB model can deliver another record year of sales and earnings,” Smart said.
The company expects sales in FY11 to reach $3 billion and net profit in the $134 - $139 million range, representing a 13 to 17 per cent increase on the previous year.