Is the JB Hi-Fi Limited (ASX: JBH) share price a buy after reporting its FY20 third quarter trading update yesterday?
As a general thought coming into the coronavirus crisis, you'd think that all retailers that have physical stores that sell discretionary products would struggle.
Well we got an insight into JB Hi-Fi's performance yesterday.
JB Hi-Fi's trading update
The retailer said that in the FY20 third quarter JB Hi-Fi Australia sales grew by 11.6% with comparable growth of 11.3%. FY20 year to date (YTD) total sales to March 2020 were up 6.9% with comparable sales growth of 6.4%.
The Good Guys saw FY20 third quarter sales rise by 13.9% with comparable growth of 13.9%. FY20 YTD sales were up 5.4% with comparable growth of 4.9%.
However, JB Hi-Fi New Zealand saw FY20 third quarter sales fall 3.3% with comparable sales decline of 3.3%. FY20 YTD sales were down 0.4% and comparable growth was a decline of 0.4%.
The JB Hi-Fi share price rose by 3.4% in reaction to these numbers.
Why is JB Hi-Fi doing so well?
JB Hi-Fi Australia and The Good Guys stores, online and commercial businesses remain open and are providing customers with the products needed to live, work and learn through the coronavirus.
The company has done a lot of things to make customers and their team members feel safer. There is additional and intensive cleaning of all stores, customer store traffic limits, social distancing practices in areas like counter queues, cashless transactions, protective screens at store counters, hand sanitiser stations at store entrances, limiting travel & meetings, flexible working arrangements and support for the health & wellbeing of employees.
It's not all perfect. It's had to close some airport and CBD locations, and the restrictions in New Zealand have caused a bit of a sales drop there. But that's the smallest division.
Is the JB Hi-Fi share price a buy?
I've been impressed at how well JB Hi-Fi has held up during this period. Perhaps smartphones and laptops are more necessary purchases than we thought. I can't really imagine a life without a smartphone any more.
The company still doesn't want to give guidance, which is understandable. Who knows what the rest of 2020 has in store?
The JB Hi-Fi share price is only down 13% from 21 February 2020. So it's not actually suffered that hard compared to others. But then again, its growth has actually increased. For now at least.
I don't think it's the bargain that some people are looking for. I think there are better share opportunities out there.
