Earnings inbound: How could JB Hi-Fi shares respond on Monday?

Finishing the week in style, the JB Hi-Fi Limited (ASX: JBH) share price is strutting higher today ahead of its earnings announcement on Monday.

Shares in the consumer electronics retailer are ticking 0.53% upwards to $46.81 as we head toward mid-afternoon. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is trending 0.7% lower, weighed down by tech and utilities.

It’s the last day for investors to take a stake in JB Hi-Fi before the release of its FY23 first-half results next week. That might explain the above-average volume traded today. More than 490,000 shares have been exchanged since the opening bell.

What could we see on Monday?

The reality is JB Hi-Fi shareholders already have a fairly good idea of what they’ll see on Monday. Most of the guesswork has been removed after the company posted preliminary unaudited figures roughly three weeks ago.

As a quick recap, the Aussie and New Zealand retailer defied the odds and achieved record sales and earnings in the first half.

Revenue was ratcheted up 8.6% year-on-year to $5,278.5 million, and net profit after tax (NPAT) increased 14.6% to $329.9 million. These numbers can change during auditing. Though, usually, the figures aren’t altered meaningfully.

What will be important — which was not included in the preliminary results — is guidance around the forward outlook. Undoubtedly, this will be a key driver for which direction the JB Hi-Fi share price goes.

Between the last update and now, the conversation has changed around how far the Reserve Bank of Australia will go with interest rate rises. This could be problematic for the retailer, as it could mean a harder hit to consumer spending and the economy at large.

The Australian bond market is now pricing in a peak cash rate of around 4%. Previously, the peak was expected to be closer to 3.7%. At present, the Australian cash rate sits at 3.35% following the 0.25% hike on Tuesday.

How have JB Hi-Fi shares responded in the past?

Which way the JB Hi-Fi share price goes on Monday will likely depend on how rosy the full-year guidance is from management. A particular focus will be on whether wage inflation could hurt earnings, or if rising rates are beginning to discourage spending.

While it holds little to no bearing on how the shares will respond on Monday, it can be interesting to review past share price reactions to earnings. The table below shows the JB Hi-Fi share price change amid its results.

Shares have moved to the downside on one occasion over the last three years.

The post Earnings inbound: How could JB Hi-Fi shares respond on Monday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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