JB Hi-Fi shares on Monday plunged 12.3 per cent to $71.65, exceeding a 10.8 per cent fall on March 23, 2020, at the start of the COVID-19 pandemic.
The company posted solid numbers for the financial year ending June 30, including record sales of $11.06 billion and a sharply higher dividend.
But investors appeared to be looking past those figures and at its trading update for the beginning of 2026/27, eToro analyst Josh Gilbert said.
Same-store sales at the group's flagship Australian JB Hi-Fi stores were down 1.4 per cent in July compared to the same month in 2025 and had dropped 1.7 per cent at its appliance chain The Good Guys.
"It is one month, it is a small month and, I would say, it's not a promotional period," JB Hi-Fi chief executive Nick Wells told analysts on a conference call.
"Promotional periods have become increasingly important when customers are looking for value.
"So periods like end-of-financial-year in June or Black Friday become really important and then maybe it touches a little bit those non-promotional periods like July."
The previous year's July sales were boosted by a new Nintendo handheld video game console and the release of Samsung's latest folding smartphone, making the comparison with this past July tougher, he said.
Suppliers had also enacted some "pretty material" price rises with less frequent discounting, Mr Wells said.
Tech companies such as Apple have blamed soaring chip prices, driven by demand from artificial intelligence data centres, for increasing costs.
It was difficult to say how much of the July sales drop was driven by rising prices and how much it was caused by cost-of-living pressures, Mr Wells said.
But Mr Gilbert said for investors it didn't much matter whether it was an issue with soft consumer demand or problems with inventory and supply.
"Rent and wages don't stop just because there's less stock to sell," he said.
JB Hi-Fi is considered a bellwether for Australia's discretionary retail companies, meaning Monday's share price fall would likely weigh on the sector, Mr Gilbert said.
RBC Capital Markets analyst Michael Toner expected the share price drop given the poor trading update for July, but said the company's results for 2025/26 were in line with consensus expectations.
The group grew its full-year statutory net profit after tax by six per cent to $489.9 million, while sales climbed 4.8 per cent.
Sales at the group's more than 200 Australian JB Hi-Fi stores rose 4.4 per cent to $7.4 billion, with same-store sales up 3.2 per cent.
New Zealand store sales rose 26 per cent to $NZ499.5 million ($416 million), with same-stores sales up 15.3 per cent.
The Good Guys sales were up 2.7 per cent to $2.9 billion.
JB Hi-Fi announced a final dividend of $1.27 a share, fully franked, up 21 per cent from a year earlier.
Including its interim dividend, the company will pay out $3.37 a share for 2025/26, up 22.5 per cent from a year ago, after last year hiking the portion of profit it aims to send to shareholders.
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