JB HiFi: TV Slump, PCs Soar

JB Hi reveals product Movers and Shakers, by category

JB Hi-Fi store sales grew 3.6% to $1.71b FY13 July-Dec, but TVs took a battering at the expense of PCs and accessories.

Although sales rose here in Oz, they declined 6% in New Zealand to NZ$117.5m due to the boost prompted by the Rugby World Cup last year.

By category, in Australia TV sales fell 12% (18% on a comparable store basis).

The retailer said comparable store sales were down due to JB dropping TV categories in its newer stores.

However, its not all bad for the TV market as the retailer is still experiencing “strong market share gains” and believes “the visual market is moving into a more typical replacement cycle, where volumes should stabilise”, it said in an investor presentation.

Hardware sales were up 6.5%, although excluding the ailing TVs category, rose 11.5% and PC, IT and accessories are selling like hot cakes, JB Hi Fi CEO Terry Smart told CN, who said the stores were a “destination” for PC buyers, “as we’re able to offer range and excellent pricing.”

Comparable store hardware sales fell 0.8%, although excluding TVs rose 4%, driven by strong sales of Cameras and Telecommunications gear.

The retailer did say the launch of Windows 8 in October did hit PC sales, although JB Marketing Manager Scott Browning told CN late last year he expects 2013 to be a hugeyear for Microsoft’s touch based platform.

Gross margin in HY13 increased to 21.8%, driven in part by the reduction in the heavy discounting seen in December 2011–good news for retailers who have been forced to engage in a price war of attrition, of late.

But pricing is expected to remain “aggressive” during the remainder of FY13 across the ditch in NZ.

However, it wasn’t such a good six months for sales of content ‘software’ like Music, Movies and Games for JB Hi-Fi stores which stumbled almost 5% and, on a comparable store basis, fell almost 11%.

JB is forecasting a fall in value of software sales from 26% (74% hardware) to 24% (hardware +2%), and said the rate of comparable store decline in software was similar to FY12.

However, its Now music streaming service continues to grow steadily and will provide longer term growth as it expands into other digital content categories, although it is not yet clear what these new digital categories will be.

JB were not available for contact at the time of writing.

On the appliance front, the retailer said its four JB Home concept store trials and sales were “encouraging”, and ahead of internal expectation.

“The new concept appears to have been positively accepted by ourcustomers, with no negative impact on the traditional JB Hi-Fi categories,” the retailer said.