Stock Spotlight: JB Hi-Fi Limited (ASX:JBH)
This week's Stock Spotlight is ASX-listed JB Hi-Fi Limited.
About JB Hi-Fi Limited.
JB Hi-Fi Limited retails home consumer products. The company operates through three segments: JB Hi-Fi Australia, JB Hi-Fi New Zealand, and The Good Guys. It provides computers; monitors and projectors, printers and ink, data storage devices, keyboards and mice, computer accessories, as well as software, home internet and wi-fi products, and office furniture; televisions; headphones, speakers, and audio devices; and smart home appliances. The company also offers mobile phones; gaming devices; music and vinyl products; movies and TV shows; and collectibles and merchandise, including apparel and card and board games. In addition, it provides content creator gears for vloggers and influences, game streamers, podcasters, and music producers and DJs; cameras; drones and e-scooters; and fitness, health, and wellbeing products, such as smart watches, fitness trackers, massagers, health monitors, air treatment devices, sleep solutions, smart drink bottles, as well as shavers and trimmers, and hair and oral care products. Further, the company offers home appliances consisting of washers and dryers, fridges and freezers, dishwashers, vacuuming and cleaning products, small kitchen appliances, microwaves, coffee and beverages machines and accessories, hair and oral care products, shavers and trimmers, and facial cleansing and beauty products, as well as heating, cooling, and air treatment products. Additionally, it provides outdoor and travel products comprising garden and outdoor living, home security and monitoring, and travel and in-car tech solutions; action and dash cameras, binoculars, drones, and smart drink bottles; electric scooters and boards; and information technology and consulting services. It sells its products through branded retail store network comprising JB Hi-Fi/JB Hi-Fi Home stores in Australia; JB Hi-Fi stores in New Zealand; and The Good Guys stores in Australia, as well as online. The company was founded in 1974 and is based in Southbank, Australia.
Source: Yahoo Finance
Key Stats
Key Stats
Source: Yahoo Finance, ASX. Data as of 02/09/24.
Price Performance
Growth Potential
- Trading in line with our valuation and price target.
- Being a low-cost retailer and able to provide low prices to consumers (JB Hi-Fi & The Good Guys) puts the Company in a good position to compete against rivals (e.g., Amazon).
- Changes in the macro environment (moderating inflation and declining interest rates) expected to be positive for sales.
- Market leading positions in key customer categories means suppliers ensure their products are available through the JBH network.
- Clear value proposition and market positioning (recognized as the value brand).
- Strong balance sheet gives flexibility to undertake additional capital management initiatives.
- Growing online sales channel.
- Solid management team.
Key Risks
- Increase in competitive pressures (reported entry of Amazon into the Australian market).
- Roll-back of Covid-19 induced sales will likely see the stock de-rate.
- Increase in cost of doing business.
- Lack of new product releases to drive top line growth.
- Store roll-out strategy stalls or new stores cannibalise existing stores.
- Execution risk - integration risk and synergy benefits from The Good Guys acquisition falling short of targets).
Subscribe to our newsletter
Disclaimer: This article does not constitute financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing.
