AI laptops selling but have a long way to go, says outgoing JB Hi-Fi boss

Artificial intelligence-powered laptops have boosted sales at JB Hi-Fi Australia, but not quite for the reasons you might expect.

Outgoing chief executive Terry Smart said AI-powered laptops were “continuing to perform well”, as the company notched a 10 per cent sales lift for the 2025 financial year, but were not necessarily selling because of the devices’ advanced capabilities.

“AI has still got a long way to go … as innovation into products,” Smart said.

“AI laptops ... are performing really well, but mainly because they are just very quick devices with great battery life. Consumers still need to see some real, solid use cases for AI, but I have no doubt that is all coming.”

More broadly, the retail chief hopes declining interest rates will spur spending. Cost-of-living pressures led many shoppers to trade down across many of their purchases or wait for sales, which affected JB Hi-Fi Australia’s gross margins.

“Consumers have been looking for better value,” said Smart, who expected bigger-ticket items such as televisions, washing machines, fridges and other home appliances to be “where the opportunities will lie”.

“As the markets continue [to] improve, consumers potentially will start gravitating towards more premium product, and that potentially could become a positive outcome for the business,” he said.

CEO steps down for a second time

The company veteran announced his last set of annual company results on Monday after revealing he would retire in early October. He will be replaced by chief operating officer Nick Wells.

Smart has spent two decades of his career at the tech retailer and is leaving the business for a second time after also holding the CEO position from May 2010 to June 2014. He re-joined the business in 2017 as managing director of the JB Hi-Fi-owned The Good Guys, before being reappointed as group chief.

Smart said he recently turned 60 and the timing felt right.

“The business in great shape, Nick’s absolutely ready to take over the helm and will be a really solid and steady pair of hands for the business,” Smart said.

There are no plans to lead a different retailer or make another return. “I don’t think there’ll be a third time,” he said. “It’s now time to step aside and let the business keep moving forward.”

Chairman Stephen Goddard thanked Smart for his contribution to the business he first joined in 2000.

“We are sorry to see Terry go and wish him all the best for the future,” Goddard said in an ASX statement.

“Having returned to the group in 2017 after a short break, Terry spent four years leading the repositioning and significant performance improvement of The Good Guys business and, since his reappointment as group CEO in 2021, the company has seen significant growth in sales and profit and its share price rise to record levels.”

Wells said he was excited to move into the role after 16 years with the company, and looked forward to building on Smart’s work in coming years.

“In JB Hi-Fi, The Good Guys and e&s we have three of the most loved, respected and successful retail brands, overseen by an experienced and incredibly talented team. Our businesses are in great shape and are well positioned to maximise the opportunities ahead of them,” he said.

“I am fortunate to have worked closely with Terry over many years, and thank him for his outstanding leadership.”

Wells will be paid $1.65 million in fixed pay after Smart retires on October 3. The incoming chief will also stand to earn 203 per cent of his salary in bonuses, bringing his total potential remuneration package to nearly $5 million.

The JB Hi-Fi group, which spans three retail businesses across Australia and New Zealand, on Monday revealed a 10 per cent increase in sales to $10.6 billion, and 5.4 per cent growth in profits to $462.4 million for fiscal 2025.

The company has announced a fully franked final dividend of $1.05 a share, bringing the total dividend to $2.75 a share. It has also declared a special dividend of $1 a share.

However, investors did not appear thrilled with the result, sending the retailer’s share price 8.4 per cent lower, to $107.83.

“The sales trends are solid and will need to continue at current levels to satisfy [analyst] consensus,” said MST Marquee senior research analyst Craig Woolford.

“We expect the mix of sales to remain a headwind to gross margin … The shares have no room for any downside risk to margins.”

JB Hi-Fi Australia drove the bulk of the sales uplift, with total sales rising 7.5 per cent to $7.1 billion thanks to new product releases, discounts, and strong demand for mobile phones, small appliances, computers and gaming hardware. Online sales rose 16.4 per cent to $1.2 billion and now comprise nearly 17 per cent of total sales.

Gross profit rose 6.4 per cent, but gross margin fell 21 basis points due to tougher competition.

Sales at whitegoods retailer The Good Guys rose 6.9 per cent to $2.9 billion as floor-care, portable appliances, cookware and computers sold strongly.

The $13 billion company has set aside $13.7 million as a one-off expense to settle a case brought by the Australian Competition & Consumer Commission against The Good Guys over misleading store credit promotions.

JB Hi-Fi is also facing a class action brought by law firm Maurice Blackburn for allegedly selling junk warranties.

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