RETAIL powerhouse JB Hi-Fi unveiled yet another record profit but the result failed to ignite the market, with investors uneasy about the company's cautious outlook.
The home entertainment chain revealed it has had a difficult start to the new financial year, with "slightly negative" like-for-like sales in July.
Chief executive Terry Smart expects the rest of the first half to be challenging, with consumer spending to stay subdued.
"It's no doubt with the higher interest rates that we are seeing that consumer confidence dampened a little," Mr Smart said.
But the new boss, who took over from long-time chief Richard Uechtritz at the end of May, said he was hopeful retail conditions would improve towards the critical Christmas trading period.
"I'd like to think as we move closer to Christmas - and we hope to see the consumer confidence picking up then - that that will then just flow on into the remainder of the financial year."
Moelis Australia analyst Todd Guyot said JB Hi-Fi's outlook was consistent with commentary from the rest of the retail sector.
"Every retailer that's sort of said anything of late has highlighted that the fourth quarter has been particularly difficult and their expectation is that that will continue through the first half of this financial year," Mr Guyot said.
JB Hi-Fi posted a 26 per cent rise in full-year profit to $118.7 million, though sales of $2.731 billion were slightly below guidance.
Total sales rose 17 per cent, while like-for-like sales grew 4.8 per cent.
Mr Smart said there was "no doubt" the company had underestimated the impact of the Federal Government stimulus on its sales the year before, with the business investment allowance driving strong sales of computer and information technology equipment.
He said the delayed launch of Apple's iPad and limited stocks of it affected the opportunity for sales.
"We also saw very tight stocks in March, April, May and leading into June of visual stock, in other words flat-panel TVs," Mr Smart said.
Citi analysts Craig Woolford and Andy Bowley said the profit was close to consensus forecasts, but had come through higher margins and lower-than-expected sales growth.
JB said it expected to produce another 17 per cent rise in sales this year, to about $3.2 billion.
Chief financial officer Richard Murray said that assumed "mid single-digit" like-for-like sales.
Mr Guyot said he expected some minor downgrades to forecasts because this guidance was slightly below the consensus view of $3.3 billion.
JB Hi-Fi shares slipped 10, or 0.51 per cent, to $19.45 yesterday.
"The outlook was relatively subdued, trading in July was soft and expectations for the first half were for tough conditions to continue so I think the market reaction largely reflected that," said RBS analyst Daniel Broeren.
But he said a "slight offsetting positive" was JB's announcement it intended to open 18 new stores this year - above its previous guidance.
JB Hi-Fi declared a fully franked final dividend of 33 a share to be paid on September 3 to shareholders registered by August 23.
The home entertainment chain revealed it has had a difficult start to the new financial year, with "slightly negative" like-for-like sales in July.
Chief executive Terry Smart expects the rest of the first half to be challenging, with consumer spending to stay subdued.
"It's no doubt with the higher interest rates that we are seeing that consumer confidence dampened a little," Mr Smart said.
But the new boss, who took over from long-time chief Richard Uechtritz at the end of May, said he was hopeful retail conditions would improve towards the critical Christmas trading period.
"I'd like to think as we move closer to Christmas - and we hope to see the consumer confidence picking up then - that that will then just flow on into the remainder of the financial year."
"Every retailer that's sort of said anything of late has highlighted that the fourth quarter has been particularly difficult and their expectation is that that will continue through the first half of this financial year," Mr Guyot said.
JB Hi-Fi posted a 26 per cent rise in full-year profit to $118.7 million, though sales of $2.731 billion were slightly below guidance.
Total sales rose 17 per cent, while like-for-like sales grew 4.8 per cent.
Mr Smart said there was "no doubt" the company had underestimated the impact of the Federal Government stimulus on its sales the year before, with the business investment allowance driving strong sales of computer and information technology equipment.
He said the delayed launch of Apple's iPad and limited stocks of it affected the opportunity for sales.
"We also saw very tight stocks in March, April, May and leading into June of visual stock, in other words flat-panel TVs," Mr Smart said.
Citi analysts Craig Woolford and Andy Bowley said the profit was close to consensus forecasts, but had come through higher margins and lower-than-expected sales growth.
JB said it expected to produce another 17 per cent rise in sales this year, to about $3.2 billion.
Chief financial officer Richard Murray said that assumed "mid single-digit" like-for-like sales.
Mr Guyot said he expected some minor downgrades to forecasts because this guidance was slightly below the consensus view of $3.3 billion.
JB Hi-Fi shares slipped 10, or 0.51 per cent, to $19.45 yesterday.
"The outlook was relatively subdued, trading in July was soft and expectations for the first half were for tough conditions to continue so I think the market reaction largely reflected that," said RBS analyst Daniel Broeren.
But he said a "slight offsetting positive" was JB's announcement it intended to open 18 new stores this year - above its previous guidance.
JB Hi-Fi declared a fully franked final dividend of 33 a share to be paid on September 3 to shareholders registered by August 23.
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