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JB Hi-Fi Ltd : Strong FY21 profit result with increased total dividend

Timothy Anderson

Timothy Anderson is a contributor with the Australian Stock Report and is currently in his final year of studying a Bachelor of Applied Economics and a Bachelor of International Relations and Politics at the University of Canberra. Tim has a genuine passion for economics, specifically in macroeconomic analysis including how certain macroeconomic policies and indicators affect financial markets and the economy, as well as how these factors affect personal investment strategies. Tim currently holds RG146 Tier 1 Generic Knowledge qualifications.

JB Hi-Fi Limited (ASX: JBH) is a specialty discount retailer of branded home entertainment products. The Group's products particularly focus on consumer electronics, software (including music, games and movies), whitegoods and appliances. The company primarily operates from standalone destination sites and shopping centre locations and its online stores in Australia and New Zealand. JB Hi-Fi has a market capitalisation of around A$5.6 billion.


What are the key features of JB Hi-Fi profit result?

JB Hi-Fi total sales increased to A$8.9 billion, or by 12.6% compared with FY20. Online sales increased to A$1.1 billion, or by 78.1% compared with FY20. Net profit after tax (NPAT) increased to A$506.1 million or by 67.4% compared with FY20.

Regarding JB Hi-Fi individual operations, JB Hi-Fi Australia total sales increased by 12% to A$5.96 billion and online sales increased by 93%. This was driven by improvements in key growth categories such as communications, computers, games hardware, visuals and small appliances. JB Hi-Fi New Zealand total sales increased by 17.4% and online sales increased by 35.6%. This was driven by key growth categories such as computers, visual, communications, games hardware and small appliances. The Good Guys total sales increased by 13.7%. This was driven by strong demand in home appliance and consumer electronic products. The key growth categories are refrigeration, laundry, floorcare, portable appliances and visual.

JB Hi-Fi management also announced a A$1.07 per share dividend, which brings the total dividend for FY21 to A$2.87 cents per share, up 51.9% compared with FY20, which represents 65% of NPAT.


What is the outlook for JB Hi-Fi?

JB Hi-Fi management provided did not provide any sales or profit guidance for FY22, which was decided based on the continued uncertainly around the impacts COVID-19 lockdowns will have on sales. That said, management did note that over the past 2 years, JB Hi-Fi has seen strong demand from consumers.


What is the market reaction?

The market reaction to JB Hi-Fi FY21 profit result is positive with the share price up 2.8% to A$49.61 while the ASX200 is down around 0.45% (16 August 2021). This suggests that JB Hi-Fi’s FY21 result is better than market expectations. JB Hi-Fi trades on a forward P/E ratio in the low-teens and a dividend yield of around 5% (fully franked).


This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purposes only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceedings. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.
ASR has no position in any of the stocks mentioned.

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