JB Hi-Fi shares fall as profit outlook weakens

JB Hi-Fi Ltd. shares fell sharply on Thursday after the Australian electronics and home appliance retailer downgraded its full-year profit guidance, citing weaker consumer demand and elevated cost pressures.

The company now expects underlying profit before tax to decline by 10% to 15% for the fiscal year ending June 30, 2025, down from its prior guidance of a 5% to 10% increase. JB Hi-Fi attributed the revision to softer discretionary spending, particularly in consumer electronics, and higher operating expenses.

Analysts had expected a more modest adjustment, with consensus estimates pointing to a 5% to 7% decline in earnings. The downgrade follows a 12% drop in same-store sales in the first half of the fiscal year, driven by reduced demand for televisions, computers, and gaming products.

Chief Executive Officer Terry Smart acknowledged the challenging retail environment, stating that while essential products remained resilient, discretionary categories had weakened materially. The company also flagged higher freight and supply chain costs as headwinds.

Shares in JB Hi-Fi fell as much as 8.3% in early trading on the Australian Securities Exchange, underperforming the broader S&P/ASX 200 index. The stock has declined 15% over the past three months, reflecting broader concerns about consumer spending in Australia amid rising interest rates and inflation.

JB Hi-Fi, which operates more than 400 stores across Australia and New Zealand, has faced increasing competition from online retailers and discount chains, further pressuring margins. The company plans to focus on cost efficiencies and inventory management to mitigate the impact of weaker demand.