JB HI-FI LIMITED (ASX:JBH) has reported record annual sales of A$11.06 billion and lifted its fully franked dividend by 22.5% to 337 cents per share, but weaker trading at the start of the new financial year has overshadowed the result.
Comparable sales in Australia fell 1.4% during the first 4 weeks of July, prompting investors to focus on the softer start to FY27 rather than the retailer’s record FY26 performance.
eToro lead analyst for APAC Josh Gilbert said the market reaction reflected concern about the recent deterioration in trading.
“Investors have stopped looking at the year that just finished and are pricing the four weeks of July instead, when comparable sales in Australia went negative at -1.4%,” Gilbert said.
The weaker July figures come as JB Hi-Fi manages supplier price increases and stock availability constraints across technology categories. The company had also brought inventory purchases forward ahead of the key June promotional period in an effort to secure sufficient stock.
Gilbert said this meant the slowdown may not be entirely attributable to weaker consumer demand, with product availability also potentially contributing to softer sales.
However, concerns remain over the potential impact on earnings if supply constraints continue, particularly given the fixed costs associated with wages and rents.
The market is also focused on weakness across the divisions responsible for the bulk of group earnings, alongside a cautious outlook for both sales and margins.
Despite those concerns, the FY26 result delivered a substantially higher return to shareholders, with the dividend increasing 22.5% to 337 cents per share, fully franked.
Gilbert said the key issue through the first half of FY27 would be whether stock availability improves sufficiently to support a recovery in sales momentum.
“JB has proven it can sell when it has the product. The question now is whether it can get enough of it onto shelves.