JB Hi-Fi – You’ve done it again!
JB Hi-Fi Limited (ASX:JBH), stamped its leadership on Australia and New Zealand’s retail landscape again, delivering impressive financial year 2025 (FY25) results, and demonstrating exceptional resilience across its portfolio of brands – JB Hi-Fi, The Good Guys, and the recently acquired E&S. With its laser-like focus on technology, consumer electronics, and home appliances, JB Hi-Fi continues to win customers, and market share, particularly among younger, tech-savvy shoppers.
Here we dive into the company’s FY25 financials, a leadership transition, and prospects for 2026 and beyond.
Company overview
JB Hi-Fi operates three distinct brands:
- JB Hi-Fi: A leading retailer of technology and consumer electronics, renowned for its appeal to younger demographics and a strong presence in Australia and New Zealand.
- The Good Guys: A trusted name in home appliances with a growing footprint in technology products.
- E&S: A premium kitchen, laundry and bathroom appliance and whitegoods business based in Victoria, acquired in September 2024, and now adding a higher-end offering to JB Hi-Fi’s portfolio.
FY25 financial highlights
With a customer-centric approach emphasising competitive pricing and exceptional service, JB Hi-Fi has further cemented its position as a retail leader in a highly competitive market.
JB Hi-Fi reported impressive financial results for FY25, exceeding market expectations and demonstrating operational strength across its divisions.
Total sales: A$10.55 billion, up 10.0 per cent year-on-year (YoY), surpassing market consensus (A$10.51 billion).
Net Profit After Tax (NPAT) excluding significant items: A$476.1 million, up 8.5 per cent, slightly above market consensus (A$474.1 million).
Reported Net Profit: A$462.4 million, up 5.4 per cent, impacted by a one-off payment related to an Australian Competition and Consumer Commission (ACCC) lawsuit settlement involving The Good Guys.
Dividends: Final dividend of A$1.05 per share and a special dividend of A$1.00 per share, both fully franked, payable on September 5, 2025.
Total ordinary dividend of A$2.75 per share, up 14 cents from the previous year.
Dividend payout ratio guidance raised to 70-80 per cent from FY26, up from 65 per cent.
Operating cash flow: A$712 million, below estimates of A$806 million, with a cash conversion rate of circa 90 per cent vs. estimates of approximately 93 per cent.
Capital expenditure: A$82 million, above estimates of A$71 million.
Net cash position: A$284 million (pre-AASB16), below estimates of A$391million.
Divisional performance
JB Hi-Fi Australia:
Sales: A$7.10 billion, up 7.5 per cent, with like-for-like (LFL) sales up 7.2 per cent (3Q25: +6.0 per cent, 4Q25: +8.2 per cent), and therefore accelerating.
Earnings before interest and tax (EBIT): A$530.3 million, up 8.0 per cent.
Gross margin: 22.0 per cent (down from 22.2 per cent prior year), impacted by increased discounting and promotions.
Cost of doing business (CODB)/Sales: 12.4 per cent (improved from 12.6 per cent prior year).
Strong demand for products like the Nintendo Switch drove sales growth.
The Good Guys:
Sales: A$2.87 billion, up 6.9 per cent, with LFL sales up 6.5 per cent (3Q25: +4.1 per cent, 4Q25: +4.0 per cent).
EBIT: A$159.8 million (A$173.5 million ex-significant items), up 1.1 per cent.
Gross margin: 23.5 per cent (up from 23.2 per cent prior year).
CODB/Sales: 14.7 per cent (up from 14.0 per cent prior year).
JB Hi-Fi New Zealand:
Sales: NZ$396.3 million (A$ equivalent up 19.1 per cent), with LFL sales up 9.2 per cent (3Q25: +7.5 per cent, 4Q25: +15.7 per cent).
EBIT: NZ$-0.2 million (NZ$-3.0 million underlying).
Gross margin: 17.0 per cent (up from 16.9 per cent prior year).
CODB/Sales: 14.7 per cent (improved from 15.6 per cent prior year).
E&S:
Sales: A$225.2 million (10 months post-acquisition).
EBIT: A$4.2 million.
Gross margin: 28.6 per cent, CODB/Sales: 23.3 per cent.
July 2025 Trading Update
JB Hi-Fi’s momentum carried into the new financial year, with LFL sales growth in July 2025:
JB Hi-Fi Australia: +5.1 per cent (vs. +5.2 per cent prior year).
The Good Guys: +3.8 per cent (vs. +2.7 per cent prior year).
JB Hi-Fi New Zealand: +24.0 per cent (vs. -4.9 per cent prior year).
E&S: -2.7 per cent (no prior year comparison).
The company’s focus on value-driven offerings and customer service continues to resonate, particularly in its core JB Hi-Fi Australia and New Zealand businesses.
Strategic leadership transition
A significant announcement accompanying the FY25 results was the leadership transition at JB Hi-Fi. After more than two decades with the company, including two stints as CEO, Terry Smart will step down in early October 2025. Smart, who rejoined the company in 2017 and resumed the CEO role in 2021, has been instrumental in driving significant growth. Since May 2021, JB Hi-Fi’s share price has surged 151 per cent, and earnings have grown 53 per cent compared to FY20, a testament to Smart’s leadership through challenging market conditions, including the pandemic and subsequent stuttering economic recovery.
Smart will be succeeded by Chief Operating Officer Nick Wells, who joined JB Hi-Fi in 2009, served as CFO for a decade, and was appointed to the board in 2021. Wells’ deep understanding of the business and proven track record make him a natural choice for the role. Chairman Stephen Goddard praised Smart’s contributions, noting, perhaps defensively, the seamless transition to Wells, which is expected to maintain JB Hi-Fi’s strong execution and strategic focus.
Analysts view the transition as well-timed, with confidence in Wells’ ability to lead the company forward.
Outlook and strategic priorities
JB Hi-Fi’s FY26 outlook remains optimistic, with planned store growth:
JB Hi-Fi Australia: 5 new stores, 1 closure.
The Good Guys: No new stores, 2 relocations.
JB Hi-Fi New Zealand: 3 new stores.
E&S: 1 new store.
The company’s ability to navigate a rapidly evolving retail landscape – marked by shifts from physical media to streaming, smartphones, and emerging tech like drones and fitness devices – underscores its adaptability and relatively flawless execution. Despite challenges like inflation and an economic slowdown, JB Hi-Fi’s focus on competitive pricing, cost management, and customer service has delivered consistent results. The raised dividend payout ratio signals confidence in sustained cash flow generation, appealing to shareholders seeking income alongside growth.
Accolades for JB Hi-Fi
JB Hi-Fi’s success lies in its deceptively simple formula: offer the best prices, prioritise customer service, and manage costs effectively. As outgoing CEO Terry Smart is reported to have said, “We always want to be the first and only place customers shop.” This philosophy has driven sales growth of 7.7 per cent in JB Hi-Fi Australia, with cost growth kept at 6.6 per cent, striking a balance that delivers value to both customers and shareholders.
However, the company’s share price has risen nearly 300 per cent since FY20, and now trades at a premium multiple of 26 times earnings, well above the consumer discretionary sector’s long-term average of 18 times. While JB Hi-Fi’s consistent execution justifies a higher multiple, the rapid share price growth of 61 per cent over the last 12 months, compared to three per cent inflation-adjusted earnings growth in the past year, raises questions about whether investors have been a little too indiscriminate in their buying behaviour.
JB Hi-Fi’s FY25 results highlight its resilience and strategic dexterity in a challenging retail environment. With strong sales growth, better-than-expected earnings, a generous special dividend, and a well-managed leadership transition, the company is positioned for continued success. As Nick Wells takes the helm, JB Hi-Fi’s focus on value, service, and adaptability will remain key to navigating the ever-changing retail landscape. Whether its lofty valuation can be sustained will depend on sentiment, exogenous events and Wells’s ability to build on Terry Smart’s legacy.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
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