JB Hi-Fi Share Price Bounces Back

JB Hi-Fi [ASX:JBH] experienced a slight downgrade in share value at the beginning of the month.

But as we approach the end of May, its shares are displaying strong signs of growth, rising by 2.12% at time of writing.

Total sales have been growing since February, while its online platform displayed a strong amount of transition prompting an accelerated sales rate.

Its shares are now valued at $23.72.

Increased sales make stable margin and gross profit

JB were able to avoid taking heavy hits during its downgrade, due to strong margin and profits.

The retailer knows where they stand as they focus on growing top line sales and increasing its gross profit overtime.

During the year, its gross profit increased by 9.8% as it was scaled at 22.0%

They managed to maintain their operating costs throughout its slight downgrade.

Thanks to increasing volume in store networks, JB were able to make a profit driven by new products.

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Operating leverage and strong sales growth drove the store to bump up its margin to a strong percentage.

In the wake of 2018, seven new stores were opened.

Its Aussie platform wasn’t the only sector that displayed sufficient results.

New Zealand also turned over an 89.8% growth in total sales, following the launch of a new website in August 2017.

JB hi-fi reported on its results:

The Board regularly reviews its capital structure with a focus on maximising returns to shareholders and believes the current dividend payout ratio of 65% appropriately balances the distribution of profit to shareholders and the reinvestment of earnings for future growth.

Total sales for JB have managed to bounce back throughout the month, facts pointing that they are back on track to making a profit.

Despite a slight bump, figures from early on in the year helped JB stand on its feet again.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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