JB Hi-Fi Ltd (JBH.AX) FY26 Results: Downgrading to Neutral on weaker sales outlook

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17 Aug 2026 11:28:49 ET │ 17 pages

JB Hi-Fi Ltd (JBH.AX)

FY26 Results: Downgrading to Neutral on weaker sales outlook

CITI'S TAKE

JB Hi-Fi delivered FY26 EBIT of $734 million, ~2% below Citi and ~1% below

VA consensus. In our view, the LFL sales growth deterioration from 3Q26

into July indicates two things: 1) Investors can no longer bank on JB Hi-Fi

generating positive sales growth through the cycle, and 2) The consumer

environment has clearly worsened, as we had been expecting. We cut our

EBIT forecasts by ~5-8% over FY27-FY28e on lower sales and some

operating deleverage. We downgrade our rating to Neutral and lower our

Target Price to $77.00.

Sales crack — LFL sales growth in JB Hi-Fi Australia and TGG has deteriorated

sequentially from 2Q26 (both up 5-5.3%) into the July trading update (both down

1.4-1.7%). While the cycling of the Nintendo Switch 2 release in June 2025 does

explain part of the slowdown for JB Hi-Fi Australia, JB Hi-Fi has never been overly

reliant on individual product releases. We think higher interest rates and petrol

prices are impacting consumer spending. Availability issues in technology products

have been more pronounced than expected, impacting on the frequency, breadth

and depth of promotions that typically drive sales. The inflation in PCs and mobiles

is clearly causing affordability issues for consumers, leading to trade down and

deferment. In this context, we don’t think the potential Apple iPhone Ultra (foldable)

release to be unveiled in September will be a meaningful sales driver. The expected

high price point (~$3,000 or more) will likely be beyond the budgets of most

consumers. We forecast FY27e LFL sales growth of 0.3% in JB Hi-Fi Australia and 0.5% in TGG.

n

Neutral ↓ from Buy

Price (17 Aug 26 16:00)

A$71.65

Target price

A$77.00↓

from A$85.00

Expected share price return

7.5%

Expected dividend yield

4.7%

Expected total return

12.1%

Market Cap

A$7,834M

US$5,549M

Price Performance

(RIC: JBH.AX, BB: JBH AU)

How will margins hold up in the face of weaker sales? — GP margins in JB Hi-Fi

Australia fell 25 bps in 2H26. We expect a further ~10 bps of GP margin compression

…