JB Hi-Fi shares fall on CEO departure, FY earnings
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More news: JB Hi-Fi shares tumbled in morning trade as the electronics retailer announced the departure of its chief executive Terry Smart and reported a mixed full-year earnings result.
Shares were down 4% to $113.01 at 11:34am AEST, having gained around 68% over the last 12 months.
Jarden analysts called it a "strong FY25 result" as underlying net profit after tax edged out consensus forecasts. However, reported NPAT, which included a $13.7 million penalty recognised by subsidiary The Good Guys during the period, was 1% behind market estimates.
The analysts also noted JB Hi-Fi's "strong start to FY26", with increases in inventory suggesting optimism for the year ahead.
What they said: "We would not expect new CEO to be taken negatively, with business in great shape both operationally and positioned for the cycle," the analysts said.
"Question will be — is the result enough given valuation and recent performance?"
JB Hi-Fi CEO Terry Smart to retire, COO Nick Wells picked as successor
The news: Electronics retailer JB Hi-Fi has announced the retirement of chief executive Terry Smart, effective 3 October. Chief operating officer and executive director Nick Wells has been appointed as his successor.
The company also reported its full-year results this morning, seeing a 5.4% rise in net profit after tax to $462.4 million. The result is up from $438.8 million last year but below average forecasts of $471.48 million, according to Visible Alpha data.
The numbers: On an underlying basis, full-year net profit after tax was up 8.5% to $476.1 million. That excludes a one-off expense of $13.7 million recognised by its appliances retailer The Good Guys to resolve court proceedings relating to misleading store credit promotions.
JB Hi-Fi recorded total sales growth of 10% year on year to $10.6 billion, and declared a final dividend of $1.05 per share, up 1.9% from last year. It takes total ordinary dividends to $2.75 cents per share, up 5.4% year on year. The company also declared a special dividend of $1 per share.
The company said its board has reviewed the group's capital structure and announced that from FY26 it will increase the dividend payout ratio from 65% to a range of 70-80% of net profit after tax.
The context: JB Hi-Fi said sales growth in Australia was driven by continued customer demand, new product releases and well-executed promotional activity. It said it key growth categories were mobile phones, small appliances, computers and games hardware.
On the leadership transition, chairman Stephen Goddard said the company is "sorry to see Terry go" after the outgoing CEO oversaw a "significant growth in sales and profit" since being re-appointed in the role in 2021. Smart was one of JB Hi-Fi's founding directors in 2000, serving 10 years as COO, before two separate stints as CEO.
Wells joined JB Hi-Fi in 2009 and served as chief financial officer for 10 years. He was appointed to the board in 2021 and named COO in 2024.
