1. Safety net shunned for investor protection
  2. Budget tax win over losses
  3. Spain tumbles back into recession
  4. Two-speed economy to widen
  5. Slower inflation gives RBA room for a 25-point cut, say economists
  6. IMF warns resource prices on way down
  7. Investment boom 'at peak'
  8. China manufacturing posts another monthly gain
  9. Bernanke flags continued low rates to boost jobs
  10. Retail investors the key to $40bn growth
  11. Apple taps cash stash for investor payout
  12. IMF chief cautiously upbeat on global economy
  13. Signs of Europe recovery offset by China weakness: OECD
  14. Greece closes critical debt deal with creditors
  15. ANZ expands in China with local currency products
  16. Less gold mined last year, but it was worth more
  17. Woolies to invest $2bn
  18. Coles to put hotels on the block
  19. Telstra signs up for NBN fibre-optic superhighway
  20. Interest rates where they should be: RBA
  21. Costco's $140m stores plan
  22. Banks face dividend hit, says Westpac as funding crunch threatens payouts
  23. Obama backs Buffet rule, higher taxes on oil industry and private equity
  24. Cautious economists tip US economy to surprise on upside
  25. Greeks seal fresh austerity deal, eurozone ministers mull debt restructure
  26. IMF shaves growth estimates for China from 9pc to 8.25pc
  27. A coin toss, but RBA likely to cut rates
  28. Retail sales drop 0.1pc in December: ABS
  29. Westpac CEO Kelly defends job cuts, refuses to comment on passing on rate cuts
  30. ANZ treasurer sees positive signs in eurozone despite funding troubles
  31. First-half results for some sectors tipped to be a bloodbath
  32. Woodside kicks off $1bn Browse sale as plans for processing plant may be axed
  33. 35,000 jobs at risk as advice reforms bite
  34. Finance sector faces big squeeze with low credit growth and high dollar
  35. Deadlocked Greek debt negotiations threaten to delay key bailout talks
  36. Beijing to stimulate economy as growth heads below 9pc
  37. ECB president Mario Draghi more upbeat as holds rates
  38. Merkel, Sarkozy up pressure on Greece, agree to push financial transaction tax
  39. Retailers made to work hard for the money by post-Christmas shoppers
  40. Manufacturing expands in December despite weak demand
  41. ECB pledge to help banks as funding pressures rise
  42. Europe crisis to hit home as liquidity dries up, says Wesfarmers
  43. JB Hi-Fi warns of earnings slump
  44. Euro banks on brink in funding crisis as collateral crunch threatens system
  45. Europe banks face $150bn capital shortfall
  46. Standard and Poor's warns of mass eurozone downgrades
  47. Rate prospects unclear as euro rescue develops
  48. CBA, Macquarie say Standard and Poor's downgrade won't affect funding
  49. Fitch lowers outlook on US to negative, affirms triple-A status
  50. Telstra chief overhauls Telstra for NBN game
  51. Leaders must 'hurry up' and solve Europe crisis: RBA's Stevens
  52. Hopes fade for US supercommittee deal on deficit reductions
  53. Risks of global recession mount
  54. U.S. Banks Face Contagion Risk From Europe Debt
  55. Greece Starts Talks With Banks on Debt Swap
  56. BHP's shale gas payoff
  57. Branded wines 'hard pressed'
  58. EU warns of recession through 2012
  59. Italian bonds hit record as Berlusconi fights for survival
  60. Emissions: who comes clean?

JB Hi-Fi warns of earnings slump

December 16, 2011

ELECTRONICS retailer JB Hi-Fi last night provided a stark reminder of the tough climate for retailers as they head into the busiest week of the year, warning of a 5 per cent drop in pre-tax earnings for the first half.

Sales from JB Hi-Fi branded stores for the first five months of the financial year were up 7.8 per cent on the previous corresponding period, ahead of the 6.6 per cent growth seen in the first quarter but still below the 8 per cent annual growth forecast issued by the company in August.

When the benefit of new store openings was stripped out, the situation looked much worse, with sales down 3.5 per cent in the first quarter and down 1.8 per cent in the first five months of the financial year.

"Sales in the second quarter have improved, but unfortunately not enough to counter the impact of the first-quarter decline in sales and margin -- driven in large measure by a high level of discounting in the market," chief executive Terry Smart said after trading had closed yesterday. Its shares are expected to fall today.

Mr Smart said some competitors were selling stock below cost to lure customers or clear excess inventory, and because JB promises to beat any market price its gross margin had been crimped by 27 basis points compared with the first five months of the previous financial year.

While the number of televisions being sold was up 15 per cent when compared with the previous financial year, this was not enough to offset price deflation of up to 25 per cent.

"As a result of these factors, we expect earnings before interest and tax for the half year to be around 5 per cent below our first half last year, subject to Christmas trading performance being in line with recent months' trends," Mr Smart said.

However, the effect at an earnings per share level would be a decline of only 1 per cent as a result of the company having bought back 9.9 per cent of its issued stock in May.

Mr Smart said there had been some positive sales trends in October and November.

He hoped strong growth in the computer and information technology categories, plus new store openings, would improve performance in the second half of the financial year.

However, City Index chief market analyst Peter Esho said it appeared JB was "trying to put a brave face on what looks like being a very tough year".

Mr Esho also noted the company had provided no explicit earnings guidance for the full year.

Article by Blair Speedy From:The Australian