JB Hi-Fi defies cost-of-living crisis
October 2024
Electronics and consumer goods giant JB Hi-Fi Group has delivered a windfall for Cornerstone investors since it was added to our parcel of 30 direct shareholdings in July this year.
The company’s share price rallied by more than 33.7% to $79.94 in the September quarter after its annual results revealed the cost-of-living crisis had not dented sales volumes.
JB Hi-Fi is a feature of shopping strips across the country – not just with its own brand but also as owner of The Good Guys (which it bought in 2016).
Mobile phones, small appliances and games hardware were among the best-selling items over the past year in its JB Hi-Fi Australia and JB H-Fi New Zealand stores. Sales of home appliances at The Good Guys also proved resilient despite the impact of inflation on household budgets.1
Total sales for the combined JB Hi-Fi Group were $9.59 billion in the year to June 30.
JB Hi-Fi was included in Cornerstone’s direct shareholdings by the algorithm which determines every stock we own. This algorithm identifies stocks based on five characteristics likely to deliver returns over the long term.
These characteristics – or “factors” in technical terms – are value, quality, low volatility, momentum and growth. The idea is that a selection of shares which each display some of these characteristics can be brought together in a portfolio which outperforms over time.
JB Hi-Fi was identified by the algorithm as it showed quality, momentum and value characteristics.
The company will continue to expand its operations by acquiring kitchens and products group E&S Trading – a business that will allow it to diversify into areas such as premium home appliances, bathrooms and construction. E&S Trading has 11 showrooms in Victoria and ACT, as well as an online presence.
1. Source: https://investors.jbhifi.com.au/wp-content/uploads/2024/08/Company-Announcement-2024-Full-Year-Results.pdf
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