An excellent result. It would be hard to table a more fantastic set of numbers, for a retailer of consumer electronics (JB’s) and household appliances (GG’s) than the below.
That said, we are inclined to view the outlook statement below as reflective of challenges that are not found in the valuation.
That statement is probably worthy of clarification. We think JBH is fairly valued relative to what it should achieve over the long run. In the interim, it is is probably overearning (in our opinion) given the pull forward in sales and earnings associated with COVID, and as such, has a reasonable chance of disappointing the market over the medium run (next few years).
The recent lockdowns do appear to be weighing heavily on sales and earnings, making it both near term and medium run that we see headwinds, despite the more positive longer run growth thematic.
Not one for us, just now.
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