Exclusive: JB Hi-Fi NZ lifts sales but remains in the red

JB Hi-Fi New Zealand reported a sharp increase in revenue in the first half of 2025, along with a significant reduction in annual loss. This improvement was driven by stronger store and online sales, which lifted gross profit and operating cash flow. However, higher occupancy and operating costs limited the business's return to profitability.

The company recorded revenue of NZD $396.3 million for the financial year ending 30 June 2025, an increase from NZD $327.9 million in FY2024. The increase was more than 20% year on year, showing improved trading conditions across its shop network.

Despite an increase in revenue, the company continued to lose money. The year's loss attributable to owners was NZD $1.49 million, down from NZD $6.80 million the year before.

Management stated that the outcome was a step closer to profitability after a period of high cost pressures and low consumer demand.

Revenue growth

Sales growth was aided by increased client traffic and transaction values. Customer receipts totalled NZD $454.8 million, up from NZD $375.0 million in FY2024.

Gross profit increased to NZD $67.3 million from NZD $55.5 million a year before. The increase represented increasing sales volumes, while margins remained under pressure due to competitive pricing.

Cost structure

As activity levels grew, operating costs followed. Sales and marketing expenses increased to NZD $42.7 million from NZD $36.8 million in FY2024.

Occupancy expenses rose to NZD $17.5 million from NZD $16.2 million, reflecting lease costs throughout the store network. Administrative expenses remained relatively unchanged at NZD $3.2 million.

Other expenses rose to NZD $4.1 million, while finance costs climbed to NZD $2.1 million due to higher borrowing and lease interest charges.

Earnings pressure

Higher operational costs and competitive pricing resulted in a loss before income tax of NZD $1.97 million, up from a loss of NZD $9.19 million in FY2024.

An income tax gain of NZD $480,000 was recognised throughout the year, which contributed to the lower net loss.

While the company did not return to profitability, the amount of improvement showed tighter cost control and stronger trading momentum.

Cash performance

JB Hi-Fi New Zealand recorded a net cash inflow from operating activities of NZD $4.2 million, compared to a cash outflow of NZD $3.63 million the previous year.

The net cash utilised in investing operations was NZD $8.87 million, mostly due to investments in plant and equipment.

Financing activities generated a net cash inflow of NZD $5.29 million, which was aided by a NZD $30.0 million equity injection, partially offset by borrowings and lease repayments.

Cash and cash equivalents climbed to NZD $5.65 million at the end of the year, up from NZD $5.03 million.

Balance sheet

Total assets climbed to NZD $136.2 million, up from NZD $104.0 million in FY2024. Inventory increased to NZD $69.6 million, reflecting stronger sales volumes and supply availability.

Total liabilities rose to NZD $79.5 million from NZD $75.7 million in the previous year. Lease liabilities remained a key part of the financial sheet.

Net assets increased to NZD $56.7 million as a result of the equity injection made this year. Contributed equity grew to NZD $90.0 million, while the accumulated deficit remained at NZD $33.3 million.

Market conditions

Consumer electronics retail circumstances in New Zealand remained tough in FY2025. While inflation fell, household spending remained restrained by higher mortgage and living costs.

JB Hi-Fi New Zealand continued to compete fiercely on price, while promotional activity remained high throughout the sector. Management stated that value positioning was crucial to preserving market share.

Outlook focus

The corporation stated that its top priority remains generating long-term profitability in New Zealand. Cost control, inventory management, and capitalising on sales growth to improve operating leverage are key areas of focus.

The FY2025 result suggests progress, but it also highlights the persistent issues that discretionary retailers face in the New Zealand market.