Consumer electronics retailer JB Hi-Fi Ltd expects its full year net profit in fiscal 2009 to be around $92 million, a 41 per cent increase on the previous year.
Full year sales will increase by 26 per cent on the previous year to about $2.3 billion, the company said in a statement.
JB Hi Fi said its full year 2009 gross margin for Australia would be “similar” to last year, despite a rapid growth in new lower margin categories such as games and a very competitive market.
And the company’s cost of business continues to decline, which will boost its earnings before interest and tax margin increase over the previous financial year.
Chief executive Richard Uechtritz said the company’s market share continued to expand and it had been able to reduce its prices from cost cutting and increased economies of scale.
“Compared to a general softness in the more traditional categories of discretionary retail spending in the economy over the past year, our experience particularly in the field of home entertainment has been very positive, as reflected in the results,” he said in a statement.
JB Hi Fi expects to open 160 new company-branded stores that are of a similar size, sales and earnings power to the current average store.
As well, it will open another 50 stores in smaller catchment areas, mainly in smaller mall and strip metropolitan shopping centres and country towns across Australian and New Zealand.
The company said this compared with 170 Harvey Norman-branded stores owned by its competitor across Australasia, as well as Woolworths’ 363 Dick Smith-branded stores also located across Australasia.
JB Hi Fi had opened 15 new stores per year on average, and had a total store target number of 210 stores from the 105 stores currently in operation, Mr Uechtritz said.
Shares in JB Hi Fi were trading 48 cents, or 3.56 per cent, higher at $13.96 by 1103 AEST.
Other articles in this week’s newsletter