JB Hi-Fi reported 1H26 EBIT up 8%. The drivers of the result were good sales growth and a slight tick-up in gross margins with higher operating cost growth. The company’s sales update for January 2026 highlighted a slowdown in momentum, which is likely to play out in calendar 2026. We expect comparable sales growth of closer to 3% for JB Hi-Fi Australia and The Good Guys over the next 18 months. In particular, JB Hi-Fi Australia has a high hurdle in the June 2026 quarter. Even though sales are slowing, the ability to extract margin support from suppliers is strong and there is flexibility in the staff cost base.