Why JB Hi-Fi Is Raising Dividends as CEO Prepares to Exit
JB Hi-Fi reported a robust FY25 with 10% sales growth and increased dividends, while preparing for a leadership change.
- FY25 sales rose 10% to $10.55 billion
- Underlying EBIT up 9.4%, NPAT up 8.5%, excluding one-off ACCC expense
- Final dividend increased to 105 cps plus a special 100 cps dividend
- Dividend payout ratio to rise to 70-80% of NPAT from FY26
- CEO Terry Smart to retire in October 2025, succeeded by COO Nick Wells
Strong Financial Performance
JB Hi-Fi Limited has delivered a solid set of results for the fiscal year ending June 30, 2025, with total sales climbing 10% to $10.55 billion. Earnings before interest and tax (EBIT) rose 7.3% to $694.1 million, while net profit after tax (NPAT) increased 5.4% to $462.4 million. When adjusting for a one-off $13.7 million expense related to the resolution of ACCC proceedings against The Good Guys, underlying EBIT grew 9.4%, NPAT 8.5%, and earnings per share (EPS) 8.5%, underscoring the company’s operational strength.
Dividend Growth and Capital Management
The Board declared a final fully franked dividend of 105 cents per share, up 1.9%, and a special fully franked dividend of 100 cents per share, together distributing $224 million to shareholders. This brings the total ordinary dividend to 275 cents per share, a 5.4% increase from the prior year. Looking ahead, JB Hi-Fi announced it will increase its dividend payout ratio from 65% to a range of 70-80% of NPAT starting FY26, signaling confidence in sustained cash flow and a shareholder-friendly capital structure.
Segment Highlights and Growth Drivers
JB Hi-Fi Australia saw sales rise 7.5% to $7.10 billion, with strong comparable sales growth driven by mobile phones, small appliances, and gaming hardware, including the launch of Nintendo Switch 2. Online sales surged 16.4%, reflecting shifting consumer preferences. The Good Guys contributed $2.87 billion in sales, up 6.9%, with gains in floorcare and cooking appliances. JB Hi-Fi New Zealand posted an impressive 20.8% sales increase, boosted by mobile phones and computers, while the newly acquired e&s segment, focused on premium home appliances and bathrooms, showed promising early results following its September 2024 acquisition.
Sustainability and Leadership Transition
On the sustainability front, JB Hi-Fi reported that 40% of its energy now comes from renewable sources and it has reduced its direct carbon emissions by 32% since FY20, aiming for net-zero by 2030. The company also highlighted investments in leadership development and community initiatives. Meanwhile, a significant leadership change is on the horizon as CEO Terry Smart announced his retirement effective October 3, 2025. Nick Wells, the current Chief Operating Officer, will take over, marking a new chapter for the retailer.
Outlook and Market Position
July 2025 sales updates indicate continued momentum, with JB Hi-Fi Australia growing 6.1%, New Zealand surging 38.1%, and The Good Guys up 4.2%. Despite ongoing retail market uncertainties, the company’s focus on value, customer service, and innovation appears to be sustaining its competitive edge. The increased dividend payout and strategic acquisitions suggest JB Hi-Fi is positioning itself for long-term growth and shareholder returns.
Bottom Line?
JB Hi-Fi’s strong FY25 results and dividend boost set the stage for growth under new leadership amid evolving retail dynamics.
Questions in the middle?
- How will the new CEO Nick Wells shape JB Hi-Fi’s strategic direction?
- What are the long-term implications of the ACCC proceedings resolution on The Good Guys?
- Can JB Hi-Fi sustain its dividend payout increase amid competitive pressures?
