After a long and very difficult few months for JB Hi-Fi Ltd [ASX:JBH], the company announced it is able to reopen its Melbourne metropolitan stores.
On the announcement of the reopening, the JBH share price price traded down 5.19% to $47.88 at the time of writing.
Although this coincided with the All Ords [ASX:XAO] being down 79 points at the time of writing, dragging most stocks down with it.
What’s been happening at JB Hi-Fi?
For a lot of retailers, the COVID-19 lockdown really took its toll. With no foot traffic through stores, making a profit became a near impossible task.
For JB Hi-Fi the saving grace is their multi-pronged business.
Competitive pricing, a huge online presence, and a range of goods that I would call lockdown friendly.
TVs, laptops, computer games, office equipment. Things that make being at home and working from home more comfortable.
Although the physical stores in Melbourne were shut for quite some time, the company is still able to report healthy growth.
For the period 1 July 2020 to 30 September 2020:
- JB HI-FI Australia total sales growth was 27.3% (pcp: 4.7%), with comparable sales growth of 27.6% (pcp: 3.7%);
- JB HI-FI New Zealand total sales growth was -2.5% (pcp: 3.8%), with comparable sales growth of -2.5% (pcp: 3.8%); and
- The Good Guys total sales growth was 30.9% (pcp: -0.5%), with comparable sales growth of 30.9% (pcp: -1.8%).
Group CEO Richard Murray mentioned:
‘Online growth combined with continued sales momentum in stores across the rest of Australia, has resulted in a strong start to FY21 and positions us well as we enter the key Christmas trading period.’
Where to from here for the JBH share price?
With the Melbourne stores reopening and Christmas just around the corner, it stands to reason that sales may continue to be strong.
It will be interesting to see the reports at the end of Q2 FY21 to see if the spending continued through Christmas or if consumers have cut back on the spending this year.
On the chart, the price created a double top recently, which can be an indication that a fall is coming.
Should the price fall below the $46 level, then a downtrend may take place.
On the upside if the price can turn, then the levels of $48.91 and the previous all-time high of $52.80 may come into focus.
For Money Morning