JB Hi-Fi, Temple & Webster sales updates spur mixed reactions

JB Hi-Fi has booked solid but slowing sales growth, while Temple & Webster has reported an upbeat update.

JB Hi-Fi shares fell strongly on slower than hoped quarterly sales. Picture: David Geraghty

The ASX has produced an unlikely winner from Donald Trump’s trade war and it has more to do with Australians’ fascination with mid-century modern furniture knock-offs than diplomacy.

With the sharemarket and investors highly sensitive to trading updates in the lead-up to the end of the financial year (also known as the May confession season), both JB Hi-Fi and online furnishings retailer Temple & Webster provided a mixed account.

A cool response from analysts to JB Hi-Fi’s sales numbers resulted in its shares diving as much as 6.2 per cent, while across town an upbeat outlook from Temple & Webster, including commentary it could actually win from Trump’s tariffs pronouncements, lifted its shares more than 7.5 per cent.

At first glance, what JB Hi-Fi posted looked like respectable or even strong sales growth since January, and especially in the light of the cost-of-living crisis that is forcing many shoppers to rein in their spending.

JB Hi-Fi, which also owns whitegoods specialist The Good Guys and kitchen and bathroom specialist e&s, said comparable sales for its flagship Australian JB Hi-Fi stores for the three months to March 31 were up 6 per cent, and total sales were up 6.5 per cent. For the year to date, same-store sales were up 6.9 per cent.

JB Hi-Fi sales for the third quarter disappointed some analysts but the retailer should see higher growth rates in the fourth quarter. Picture: Andrew Henshaw

The Good Guys was a little softer, reporting third-quarter sales growth of 4.1 per cent, while e&s sales were up 0.9 per cent.

“In a challenging and competitive retail market, we are pleased to see sales momentum continue in the third quarter of fiscal 2025,” JB Hi-Fi chief executive Terry Smart said.

“As we approach the important end of financial year trading period, we remain focused on delivering consistently high levels of customer service and exceptional value for our customers.”

Analysts were more sceptical about the sales momentum.

Citi analyst Adrian Lemme described the update as a “slight sales miss”, with the quarterly performance trailing his and the market’s consensus expectations. He said it also reflected a slowdown in sales compared to the last update.

“JB Hi-Fi Australia’s third-quarter like-for-like sales growth of 6 per cent was below its January update (7.1 per cent) but in line with (market) consensus expectations of 6 per cent like-for-like sales for the second half,” Mr Lemme said.

He said The Good Guys reported a fall in same-store sales ­momentum, from 5.9 per cent in the January update to 4.1 per cent for the third quarter.

“We expect there to be slight (market) consensus downgrades, particularly for The Good Guys,” he said. “Given the stock’s recent strong performance, we expect it to trade lower today.”

JB Hi-Fi CEO Terry Smart. Picture: Arsineh Houspian

But Mr Lemme said he believed JB Hi-Fi ultimately would benefit from an improving economic environment for the consumer and gaining market share.

“Today’s update does not change our thinking,” he said. “While sales came in slightly below Citi and (market consensus), JB Hi-Fi Australia’s market share growth was consistent with prior quarters. Moreover, we expect momentum to improve in the fourth quarter, driven by rate cuts and the end-of-financial-year sales as consumers increasingly shift spending to the more promotional periods.

“The outlook remains strong, driven by an improving consumer environment, category-specific growth drivers, for example PCs, mobiles, robot vacuums, and continued market share growth.”

Citi expects a stronger sales growth rate in the fourth quarter.

JB Hi-Fi shares recovered some ground to close at $103.45, down 16c.

It was a very different story for Temple & Webster. The pure-play online retailer, whose shares are already up 42 per cent this year, said revenue growth had accelerated over the second half to be up 18 per cent between January 1 and May 5. Since March 1 that growth had lifted to 23 per cent, and its earnings margins were now expected to be towards the top end of its guidance range.

Its burgeoning home improvement and hardware category was outperforming and had recorded revenue growth of 42 per cent for the second half to date.

Temple & Webster CEO Mark Coulter said the US-China tariff war had been a net positive for its business, most directly felt through lower inbound shipping rates of about 20 per cent. “If these deflationary effects continue, combined with some of the macro tailwinds we are seeing – such as reducing interest rates and stimulatory Australian government policies around housing – we should see market conditions improve further,” Mr Coulter said.

Citi analyst Sam Teeger said the update was positive, “given sales growth has accelerated 18 per cent in the half to date, up from 16 per cent in the first six weeks, with March 1 to May 5 growth accelerating further to 23 per cent.

“We are particularly pleased, given sales have accelerated in an environment where housing indicators are yet to materially improve.”

Temple & Webster shares rose 7.95 per cent to $18.60.

Originally published as JB Hi-Fi, Temple & Webster sales updates spur mixed reactions