Despite a horrendous start to the year for the Australian share market, shares of JB Hi-Fi Limited (ASX: JBH) have surged higher so far in 2016. The shares have risen 14.5% since the beginning of the year, and 26.3% since mid-December, and are now trading at $22.35. They hit their highest level since late 2009 earlier this week at $23.94.

It seems most likely that one of the reasons behind the sudden JB Hi-Fi share price rally was the highly-publicised collapse of its rival Dick Smith Holdings Ltd (ASX: DSH). Dick Smith was one of the major players in Australia’s electronics retail market, and its demise is expected to result in a considerable boost in sales for JB Hi-Fi as well as Harvey Norman Holdings Limited (ASX: HVN).

Source: ASX website; 6 month price chart of JBH

Source: ASX website; 6 month price chart of JBH

Considering Dick Smith was only officially placed into administration early in 2016, the boost in sales will not have had any impact on JB Hi-Fi’s earnings results for the six-months ended 31 December 2015.

However, investors will hope for strong sales growth based on reports from the Australian Retailer’s Association of record Boxing Day sales around the country, topping off a strong Christmas period. The ARA said roughly $2.3 billion of transactions were processed on 26 December alone, while sales in the month of November were 4.2% higher than the previous year. It also forecast $16.8 billion of sales between 26 December and 15 January.

Better yet, one of the stronger performing categories in November was reportedly ‘household goods’, which rose 6.3%. This bodes well for JB Hi-Fi based on the company’s expansion into that market through its new ‘HOME’ format stores.

According to estimates pulled from Yahoo! Finance, a group of 17 analysts have an average forecast of $3.86 billion in sales for the full-year, compared to $3.65 billion in financial year 2015. Given how important the Christmas period is for retailers, investors will be eager to learn just how well the company performed and whether it could potentially beat that forecast.

Although JB Hi-Fi’s shares aren’t exactly ‘cheap’ today, they could still be a good pick-up for investors who are focused on the long term. In saying that however, investors also need to consider the risk that sales could slow down if economic conditions continue to deteriorate or if demand for ‘household goods’ declines should property prices continue falling.

I don’t own the shares currently, but given that they are also trading on a 4.2% fully franked dividend yield, they are certainly on my watch list.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.