JB Hi-Fi Ltd [ASX: JBH] have blamed a challenging market for its downgrade in profit, which resulted in its share price falling almost 9% today.
The home appliance market put forth a challenge for their whitegoods and appliances chain acquired last year, The Good Guys. Having faced hardships with heightened price competition across the market.
The tougher market conditions stemmed from poor second half gross margins in the financial year.
JB tried to focus on sales and market share, but struggled.
Their shares are now valued at $23.50 a share.
JB released a presentation which included information on trading updates and share price decline.
The release pointed out that JB had gone through weak sales during its third-quarter.
Year-to-date sales for JB have slowed, while store growth has also been significantly slower than usual.
The Australian Financial Review reported that the company said in an investor presentation:
‘Whilst the challenging conditions in the home appliance market are expected to impact performance in the short term, we remain confident in the group model and the medium- and long-term outlook for The Good Guys and JB Hi-Fi.’
JB Hi-FI will attempt to counter the decline in share value as they plan to further expand various categorise such a PC gaming, home automation and ecommerce platforms.
The Good Guys were also affected by the sector conditions. They too faced challenges across the market.
Weak customer confidence and declining digital competition are continuing to plague JB’s wellbeing and business performance.
Despite their disappointing results, JB have confidence that their business will continue to perform strong in the future, and fall in line with extended expectations.
Revenue was up for JB back in December, and they have gone through a positive increase in share value. Unfortunately, poor market rates caught up with them and they were impacted by its outcome.
Editor, Markets & Money
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