DRIFT TO THRIFT DRIVES JUMP IN AUST'S JB HI-FI'S Q1 COMP SALES

Look up the PowerRating of JBHIF and see how it has performed over the past week as well as the current proprietary PowerRating.

MELBOURNE, Oct 14, 2009 (AsiaPulse via COMTEX) -- JBHIF | Quote | Chart | News | PowerRating -- A "drift to thrift" by Australian consumers has delivered JB Hi-Fi Ltd a large 8.4 per cent jump in first quarter sales, allowing it to maintain its annual sales guidance and lift its target for new store openings.

Re-elected chairman of the electronics retailer, Patrick Elliott, told shareholders on Wednesday there was no reason why the group's margins or cost base would deteriorate and have a material impact on its 2009/10 earnings.

"We still have Christmas, which is a very important part of the year for us," he said at the retailer's annual general meeting in Melbourne.

Chief executive Richard Uechtritz said if the strong September quarter sales performance continued JB Hi-Fi would enjoy "reasonable" Christmas sales.

JB Hi-Fi reported a surge in comparable store sales on Wednesday from 3.8 per cent for the first five weeks of 2009/10 to 8.4 per cent for the entire first quarter, from the same quarter a year ago.

The company maintained its guidance for full year sales of around $2.8 billion, which would be an increase of 20 per cent hike on 2008/09. JB Hi-Fi generated a record net profit of $94.4 million in that year.

It also lifted its planned new store openings under the JB Hi-Fi brand to 22, from 18, for 2009/10.

A number of the new stores will be opened late in 2009/10 and "won't make too much of a difference" to total sales, Mr Uechtritz said.

A total of 15 new JB Hi Fi-branded stores would be opened in the six months to Christmas making 137 in total, still well off its longer term target for 210 stores across Australasia.

But the expansion of its Clive Anthonys-branded whitegoods stores had slowed until the brand had been properly positioned, Mr Elliott said.

The company will also create over 700 more jobs in 2010, he said.

JB Hi-Fi's shares catapulted 92 cents, or 4.97 per cent to end at $19.42 on Wednesday in response to the "huge" jump in first quarter sales.

"It's an amazing number," FW Holst retail analyst David Spry said.

"That eight per cent or so does mean the market is certainly reasonably good and leading up to Christmas it is a good sign."

Mr Elliott said JB Hi-Fi had seen market share growth in a number of product categories as a "drift to thrift" by consumers drew in new shoppers focussed on price.

"The company has won customers that may not have previously shopped in our stores and now the opportunity is to keep those customers as economic conditions improve," he said.

JB Hi-Fi was not fazed by rising interest rates and the phasing out of the federal government's economic stimulus and first home buyers' grant bonuses.

"The [absence of] cash handouts are more than offset by the extra confidence in the marketplace, the interest rates still staying historically low, unemployment figures not going up, petrol prices beginning to stabilise, the value of share portfolios rising, real estate prices going up," Mr Uechtritz.

Separately, JB Hi-Fi is holding over $100 million in franking credits and will not return the surplus funds to shareholders until net debt has been reduced further, Mr Elliott said.

(AAP) lm

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index