JB Hi-Fi reported its smallest revenue increase ever, thanks to the change in model it executed last year. Closing one store and the halt of selling whiteware saw a profit of less than 0.5 percent for first-half earnings.
The cost of closing a store was reportedly what saw the brand bring in a smaller profit than usual, with $400,000 attributed to the cost of closing. The store also required a rebrand after stopping the sale of its whiteware selection.
A margin of just 0.02 percent was the company’s final take, which implies earnings of about $25,000. Revenue fell 0.4 percent to $124.6 million and gross margin shrank 169 basis points to 16.31 percent.
Government figures show the value of electric and electronic goods retail sales rose 5.8 percent $3.22 billion in the March 2017 from a year earlier, lagging an 11 percent increase in the volume of sales. Over a five-year period, the value of sales rose 20 percent compared to volume growth of 76 percent.
JB Hi-Fi today said online sales almost doubled since the launch of a new website in August last year, accounting for 3.8 percent of first-half sales, or $4.8 million, compared to 2 percent a year earlier.
The company's 15 New Zealand stores are a small part to the Australian group's 311 JB Hi-Fi and Good Guys retail outlets.
Despite the drop, the company are expecting full year profit to fall between AU$235-$240 million, as the brand steadies itself after the changes.