JB Hi-Fi Limited

JBH Hi-Fi Australia’s Sales Rose YoY: The sales of JB Hi-Fi Australia stood at $4.5 billion which reflects the YoY growth of 9.4%. With respect to the same business, the software sales encountered a fall of 8.5% while on the comparable basis it witnessed a fall of 11.2% because of the unfavourable momentum with respect to movies category. However, the fall in the software sales got partially offset by favourable momentum which was witnessed in the category of Games Software.
 
JB Hi-Fi Australia (Source: Company Reports)

In JB Hi-Fi Australia, the online sales with regards to Australia witnessed the rise of 32.1% in FY 2018 on pcp (or prior corresponding period) and stood at $209.9 million. In the same period, of the total sales, the online sale contributed 4.6%. There have been improvements as well as deployments in the Online offer.  

JB Hi-Fi Limited happens to be at the decent position with respect to important margins and ratios. The company’s net margin witnessed the rise from 3.1% in FY 2017 to 3.4% which implies 0.3% YoY rise. Also, as compared to the industry median, the company’s return on equity or ROE is significantly higher. In FY 2018, the company’s posted ROE of 25.9% while the industry median was 12.6%.

Important Numbers of FY 2019: JB Hi-Fi Limited had given the expectations for FY 2019 by the press release dated October 25, 2018. As demonstrated by the release, there are expectations that in FY 2019 the company might witness total sales amounting to approximately $7.1 billion. The company is expecting that JB Hi-Fi New Zealand would be witnessing the sales of NZD$0.22 billion. However, JB Hi-Fi Australia and The Good Guys might witness the sales of $4.75 billion and $2.15 billion, respectively.

Stock Analysis: On the daily chart of JB Hi-Fi Limited, Relative Strength Index or RSI has been applied and default values were taken into consideration. As per the observation, the 14-day RSI is about to reach the oversold region. Once it reaches the oversold region, there are expectations that there might be rebound. Therefore, the stock might encounter upward trend moving forward. Hence, the market players need to watch the stock’s movement carefully at the current market price of A$20.420 per share.

Accent Group Limited

YoY Growth Witnessed in Gross Margins: Accent Group Limited (ASX: AX1) posted gross profit amounting to $370.08 million which implies the YoY growth of 13.5%. The company’s gross margins have also improved 2% to 54.8% in FY 2018 on the YoY basis on the back of penetration of the vertical brands, robust momentum witnessed in the retail growth as well as company’s strategy to cut down the retailing which was driven by the discounts.


Summary Financial Performance (Source: Company Reports)

However, in FY 2018, the company also witnessed a rise in the CODB (cost of doing business) on the YoY basis because of deployments towards the infrastructure with respect to the new stores, digital marketing as well as towards digital support team. However, the operating expenses related to the new stores also contributed to the YoY rise in CODB.  

Deployments to Pay-Off Well Moving Forward: In the annual general meeting presentation of 2018, Accent Group had stated that in H2 FY 2019, the company might witness a growth of mid-single digit with regards to the EBITDA.Moreover, as depicted by the annual report for FY 2018, the company happens to be in the robust position to give growth with respect to the shareholder value as well as to extend superior customer experience. This is possible because of the deployments that the company has done towards the stores, digital capability, marketing as well as towards people.

Stock Recommendation: On the daily chart of Accent Group, Relative Strength Index or RSI has been applied and the default values have been taken into consideration. As per the observation, the 14-day RSI is trending towards the oversold region. Once it reaches the oversold region, there might be a rebound. Thus, the stock might witness bullish momentum moving forward.

As a result, we maintain our “Hold” rating on the stock at the current market price of A$1.140 per share (down 1.724% on January 03, 2019).     
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.