April 27, 2012
The Age
Home entertainment retailer JB Hi-Fi expects its profit to fall in the current financial year as its margins are hit by heavy discounting.
The company on Friday said it expected to post a net profit of $100 million to $105 million in the year to June 30, which would be down from $109.7 million in the previous financial year.
Sales improved progressively over the three months to March 31, and the company still expects to make $1.3 billion in sales for the full financial year.
But market-wide discounting caused JB Hi-Fi’s gross margin to fall by two percentage points in the three months to March.
“We anticipate that this level of discounting will continue over the next quarter, but we do not believe that this is a long-term structural change,” chief executive Terry Smart said in a statement.
“While the impact on our earnings is clear, as a market leader with an everyday low price proposition, JB Hi-Fi will react aggressively to maintain our market leadership.”
Comparable store sales in April are expected to be lower, and the company expects comparable store sales to be down by as much as 2.5 per cent in the final three months of the financial year.
AAP
Read more: http://www.theage.com.au/business/jb-hifi-expects-profit-to-fall-again-20120427-1xotq.html#ixzz1tBzJtE1R
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