JB Hi-Fi has announced that its sales declined by just 2% over the past 6 months - which was actually a good result compared to expectations.
👉 Background: JB Hi-Fi is known for its big yellow signs, warehouse vibes, and handwritten price tags. And, it has been a bit like resilient weeds in a backyard - it just keeps growing and growing - despite the environment around it.
👉 What happened: Now, JB Hi-Fi has announced that its sales declined by just 2% over the past 6 months - which was actually a good result compared to expectations. But the real kicker was that its interim net profit sunk by more than 20%.
👉 What else: JB Hi-Fi's CEO reckons that customers are doing more research, which is forcing their staff to reduce prices in-store to price match. But supposedly in the long run, it's a good thing because it will lead to that famous buzzword "operational efficiency."
💡Operational efficiency is all about doing more with less. It's a measure of how well a company uses its resources to produce goods and services.
💡On the one hand, the price-matching means lower gross margins on their products. On the other hand, it means customers are faster to transact and the opportunity to actually reduce headcount in store (or sell more per employee).
💡Although this "operational efficiency" is the end goal - it hasn't quite played out that way yet. JB's cost of doing business actually increased from 11.4% of sales to 11.9% in this half. But, it reckons that with Stage 3 tax cuts and a potential decrease of the cash rate, it could be boom-town once again.
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