One of the first signs that retail sales over the holiday season were positive is the half-year report of JB Hi-Fi Limited (ASX: JBH). Total sales were up 6.8% to $1.94 billion, up from $1.82 billion in the previous corresponding period (pcp).
What will really cheer up investors is the $90.3 million in NPAT achieved, up 10%. Earnings per share saw a 9% gain to 90.5 cents per share. An interim dividend of 55 cents per share, fully franked, was declared, rising 10% from the pcp. Its share price is up 2.56% to $18.46 in mid-morning trading.
JB Hi-Fi CEO Terry Smart said: "We have seen positive comparable sales across the majority of our hardware categories, the successful introduction of home appliances and strong growth in our commercial division. Gross margins also improved and costs continued to be well controlled, all contributing to solid NPAT growth for the half year."
We have yet to hear from other retailers Harvey Norman Holdings Limited (ASX: HVN), David Jones Limited (ASX: DJS), Myer Holdings Ltd (ASX: MYR) and Kathmandu Holdings Ltd (ASX: KMD) about holiday season sales. Last month Super Retail Group Ltd (ASX: SUL) released a half-year trade update showing a 6% increase in total revenue over the pcp at $1.09 billion. It did, however, state that it expects half-year NPAT for the 26 weeks to 28 December, to be between $61 million to $62 million, up 0.7% to 2.3% over the pcp.
During the half year, JB Hi-Fi grew store numbers by six, including one of its JB Hi-Fi HOME format stores, which includes appliances and white goods. One store was closed, bringing total stores to 182. It plans to open eight new stores by end of FY 2014, moving towards its target of 214 stores.
For its FY 2014 full-year guidance, it estimates total sales to be up 6%-8% and NPAT to be $126 million – $129 million, a rise over the prior year of 8.3% – 10.8%.
Foolish takeaway
The February reporting season opened up well with JB Hi-Fi. Hopefully, it will confirm whether the momentum from pre-holiday season sales held up all the way through. Most importantly, profit margins will indicate to investors how much discounting was required for sales increases across the different retailers.
