The JB Hi-Fi Share Price Is on the Move (ASX:JBH)
One of Australia’s largest electronic retailers is flying. After experiencing a large drop in their share price at the start of the year, JB Hi-Fi Ltd [ASX:JBH] are now within striking distance of their previous all-time high.
At the time of writing, the JBH share price sat at $41.48, just under 10% below the previous all-time high of $46.09.
How did they fall…
In March 2020 the company provided an update of trading conditions in line with the impact of the COVID-19 virus. Announcing the temporary closure of some stores across the group and social distancing practiced in high-traffic areas.
This was in line with the broader community — people being forced to work from home, shopping centres shutting up non-essential stores, and an overall drop in global stock prices.
The shock of all this plummeted stock prices.
How have they moved up…
With many people being forced to work from home, the knock-on effect has been a boost to online sales with people requiring new equipment to do their jobs from home, along with requirements for families needing to school their children from home.
Another element that cannot be discounted is with more people at home they are doing more shopping online due to having idle hands.
In a market announcement released 11 June 2020, it was noted that:
‘The Group has seen strong sales growth in 2H20 in JB HI-FI Australia and The Good Guys as customers spend more time working, learning and enjoying entertainment at home. Strong operating leverage from this elevated sales growth, combined with disciplined cost control, has more than offset the investment in additional operating costs associated with ensuring team members and customers remain safe during COVID-19.’
Moving over to the charts, the price has moved up over 102% from the March low. If the price continues to the upside, the next natural level of resistance would be the previous all-time high of $46.13.
Should the price fall back, then the previous historical support levels of $37.55 and $35.68 may come into play.
For Money Morning