JB Hi-Fi delivers the goods

They call it momentum in the trade. But no matter how you look at it, JB Hi-Fi is on a roll.

Its stock has doubled in the past year, with much of that rise in the past six months. And all this during a period of weak consumer demand and a retail landscape that has been laid waste by the internet – a theme that has contributed to it being the most heavily shorted stock in the S&P/ASX 200.

For a company that harvests a mere 2% of its revenue online, the company appears to be redefining the concept of old-style retailing. Enormously popular with younger consumers, it projects an image of modernity by maintaining maximum flexibility that allows it to quickly adapt to shifts in consumer tastes while keeping a lid on costs.

On top of that, it constantly is exploring expansion opportunities in terms of its existing operations and in new avenues like its fledgling home appliance business.

The results, released this morning, were largely in line with expectations, with an 11.2% in net profit to $116.4 million. The 7c a share lift in dividend to 72c didn’t hurt either.

But it was the forecasts for future growth that kept its shares running higher, even after such strong gains in recent months.

Forecasts for sales growth of between 6% and 8% in the year ahead were stronger than expected. And with the Reserve Bank’s interest rate cut last week clearly designed to lift consumer sentiment and boost sales activity, the company appears to be well placed to continue its gains.

Like for like sales have been creeping higher in recent months while margins have expanded even as the roll-out of new stores proceeds apace with 14 new stores scheduled this financial year.

The weaker Australian dollar will no doubt have an impact. Television sales, which already have declined, are likely to weaken further as prices rise. But JB Hi-Fi so far has managed to adapt in a difficult climate where others have not (see Adam Carr's Is this the bottom for retail?).