This morning, JB HI-FI (JBH), the local electronics and home appliance retailer, delivered a strong set of first half 2026 results, which were ahead of expectations. JBH’s profit results showed no signs that consumers were tightening their purse strings in response to the cost-of-living crisis. HNW has a 2% weight to JB Hi-Fi.

 Key Points:

  • Profits Up: JB Hi-Fi reported strong earnings growth of +7% to $306 million, driven primarily by record sales of $6.1 billion over the half. Consumers have continued to prioritise purchases of Mobile Phones, Small Appliances, games
  • consoles, computers and wearable fitness devices. Profit margins are up across both JB Hi-Fi and The Good Guys.
  • No Debt: JBH continues to have one of the best balance sheets on the ASX, with a net positive cash position of $490 million. Conversely, JBH’s competitor, Harvey Norman spends close to $100 million per annum to service their $1B plus debt pile, which gives JBH a cost advantage along with the carefully curated perception of the cheapest electrical goods retailer in Australia.
  • Dividends Up:  Interim dividend up +24% to $2.10.  What was interesting is that JBH have slowed their store rollout to only 4 net new stores in 2026, focusing on driving productivity through existing stores and online sales, which increased +11% to make up 18% of total sales. In the absence of large capex, no debt to service and a growing franking account balance, JBH opted to increase returns to shareholders.
  • Outlook: JB Hi-Fi management provided a strong trading update, showing that JB Hi-Fi Australia’s sales grew by 4% in January 2026, a surprisingly strong outcome given January 2025 saw +7.5% sales growth.
  • Why is the stock up? JBH’s share price has been weak along with all retailers over the past quarter, based on the assumption that rising mortgage rates would see sales decline. In this result, there was evidence that tech devices are seemingly becoming less discretionary, however we may see consumers cut back on buying couches (Nick Scali) or travel (Flight Centre).

JBH finished up +7.5% to $82.40    

Portfolio Strategy: JBH’s business model is based on low prices, low overheads, and high volumes. Regarding the cost of doing business (rent, administration and sales staff costs), divided by sales, JBH is one of the most efficient retailers globally, a remarkable outcome given Australia’s high wages and is Australia’s largest electrical retailer and the world’s seventh-largest electrical retailer.  More importantly,  JBH has consistently recognised declining (CDs) and growing (fitness devices) categories and switched inventory to take advantage of these shifts; the expansion into Home and white goods has proved very successful.  JBH looks cheap for a premium retailer trading on a PE of 16x with a 4.5% yield after a share price pullback. We added to the position in late January on weakness.