JB Hi-Fi (ASX:JBH) reported record sales and higher earnings for the first half of fiscal 2026, with management pointing to strong promotional execution, continued demand for technology and appliances, and improving performance in New Zealand. Executives also struck a cautious tone on near-term trading conditions, citing ongoing competitive activity and broader uncertainty in the retail market.
Record half-year sales and higher interim dividend
For the half, the group posted total sales of AUD 6.1 billion, up 7.3%. Earnings also rose, with EBIT up 8.1% to AUD 454 million and NPAT up 7.1% to AUD 305.8 million. Earnings per share increased 7.1% to AUD 2.797.
Division highlights: technology strength, appliances demand, and New Zealand rebound
JB Hi-Fi Australia delivered higher sales and earnings, with total sales up 6.3% to AUD 4.12 billion and comparable sales up 5%. Management said demand remained strong in technology and consumer electronics, supported by promotions. Mobile phones performed well, “particularly at Apple,” with strong unit sales across brands and handset-level average selling price (ASP) growth. Small appliances remained a standout, with coffee, robotic vacuums, kitchen appliances, and expanded personal care ranges performing well, including demand for new products from Ninja.
Games hardware benefited from the late-FY25 release of the Nintendo Switch 2, while computers grew on strength in Apple, AI-enabled devices, and gaming PCs. Within fitness, wearables performed strongly and the company pointed to positive results from expanded health and well-being categories. Online sales rose 11.2% to AUD 759 million, representing 18.4% of divisional sales.
Gross margin in JB Hi-Fi Australia increased 11 basis points to 21.95%. Management attributed the improvement to category performance and said mix “wasn’t a big headwind” in the half, with growth in categories such as small appliances helping offset weaker TVs. Cost of doing business (CODB) was 11.81%, up 5 basis points, reflecting investment in stores and strategic initiatives. EBIT rose 7.7% to AUD 340.9 million, with EBIT margin up 11 basis points to 8.27%.
JB Hi-Fi New Zealand posted strong growth, with total sales up 32.6% to NZD 268.6 million and comparable sales up 20.2%. Growth was led by mobile phones, computers, and small appliances, while audio saw strength in headphones, soundbars, and party speakers. Online sales increased 47.7% to NZD 47.8 million, or 17.8% of sales. CODB improved 110 basis points to 12.73%, and EBIT rose 104.5% to NZD 4.5 million, with EBIT margin up 59 basis points to 1.69%.
The Good Guys reported total sales up 4.1% to AUD 1.58 billion and comparable sales up 4%. Management said results were supported by customer demand for home appliances and well-executed Black Friday and Boxing Day promotions, which drove a strong second quarter. Category commentary included portable appliance growth led by coffee machines and new Ninja products, strong floor care growth underpinned by robotic vacuums, and gains in in-built cooking and range hoods. The retailer also cited shifts toward larger-capacity French door fridges, growth in wine cabinets, and consumer movement into larger washers, combo washers, and heat pump dryers. Online sales rose 14% to AUD 266.1 million, or 16.8% of sales. EBIT increased 8% to AUD 107.4 million, with EBIT margin improving 24 basis points to 6.79%.
e&s integration continues as investments weigh on near-term earnings
Management said the group remained focused on integrating e&s and investing in systems, processes, and capability to support future growth. For the six months to 31 December 2025, e&s recorded total sales of AUD 144.8 million. The company noted that, on a statutory basis, sales were up 56.8% due to the timing of consolidation in the prior period, while on a comparable six-month basis sales increased 2.9% and comparable sales were down 0.1%.
Gross margin was 29.96%, up 261 basis points, which management attributed to sales mix. CODB rose 283 basis points to 25.26% due to investments in new stores and the commercial division. EBIT was AUD 1.7 million, which management said was in line with expectations during the investment phase.
In Q&A, executives described e&s as a “long-term play” targeting a more premium customer and the renovation and construction markets. They said investment in the cost base is expected to continue for “the next 12 or so months,” and pointed to long lead times between written and delivered sales in construction-related orders as a factor affecting the timing of returns.
Balance sheet, cash flow, and investment priorities
Inventory was AUD 1.41 billion, up 6.7% year-on-year and “in line with sales growth,” while inventory turnover dipped 21 basis points to 6.93 times. Payables rose 1.7% year-on-year, and net working capital was negative AUD 67 million, which management said had “returned to more normal levels.”
Operating cash flows and operating cash conversion were down year-on-year due to working capital normalization but were described as still strong. CapEx totaled AUD 46.9 million, up 20.7%, reflecting investment in the store portfolio, online, and strategic initiatives. Net cash at 31 December was AUD 489.5 million, which management said is seasonally high.
Management outlined four group focus areas:
- Retail execution: Demonstrating value in a competitive environment while keeping the model simple and efficient and reinvesting productivity gains into customer-facing roles.
- Multi-channel: Strengthening online capability, expanding marketplace, and using membership programs to deliver personalization at scale.
- Brand reach: Store network expansion planned in FY2026, including 3 JB Hi-Fi New Zealand stores, 1 e&s store, and 4 JB Hi-Fi Australia stores.
- Supply chain: Continued work to improve delivery options, inventory flow, and bulky goods handling.
On supply chain investment, management said it is “not expecting a significant increase in CapEx” in the short to medium term, citing recent work including implementing a new transport management system and testing centralized online fulfillment in New South Wales via a dark store.
January trading update and outlook themes
For January (1 January 2026 to 31 January 2026), the company reported:
- JB Hi-Fi Australia: total sales growth 4%, comparable sales growth 2.4%
- JB Hi-Fi New Zealand: total sales growth 26.4%, comparable sales growth 16.7%
- The Good Guys: total sales growth 2.7%, comparable sales growth 2.7%
- e&s: total sales growth -4.6%, comparable sales growth -7.9%
Management said January growth moderated versus the first half, attributing some of the dynamic to the absence of major promotional periods, while noting customers are seeking value and promotional periods have been outperforming. Executives also said they remain cautious due to retail market uncertainty and continued competitive activity.
In Q&A, management discussed several forward-looking category considerations. In PCs, they said suppliers are pushing price increases due to higher memory and storage costs, with increases “likely to hit for March” and averaging around 20% at the supplier level. The company said it does not expect ASP increases of the same magnitude and plans to maintain key price points through range and specification changes, while aiming to hold gross margins. Executives also cited replacement-cycle tailwinds from COVID-era PC purchases and the end of Windows 10 support as demand factors.
On TVs, management described the category as soft and heavily promoted across the industry, which has pressured ASP, and said it expects improvement over the next 12 months, mentioning new RGB technology and easier comparisons. Management also said competition remains intense but described it as primarily from incumbent multi-channel retailers, while adding it has not seen a significant change in Amazon’s competitiveness.
About JB Hi-Fi (ASX:JBH)
JB Hi-Fi Limited, together with its subsidiaries, 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, such as laptops, desktop PCs, iPads, tablets, eBook readers, monitors and projectors, printers and ink, storage devices, keyboards and mouse, computer accessories, as well as software, and home internet and wi-fi products; televisions; headphones, speakers, and audio devices; and smart home appliances.
