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Is JB Hi-Fi Limited Australia’s best listed retailer?

Investors in electronics retailer JB Hi-Fi Limited (ASX: JBH) have been through a rollercoaster start to 2014. In early February the company delivered what can only be described as extremely impressive half-year results, and yet the company’s share price continued to plunge until a 2014 low of $17.70 was reached in the middle of that month. The low represented a fall of 18% from the start of the year, however a recent rally has pushed the share price back over $20 to be down just 6% for the year.

The results were impressive because unlike some of its listed rivals, JB Hi-Fi managed to grow overall sales by 6.8% year-on-year, same-store sales by 2.8%, and net profit after tax by 10%, which culminated in a 10% jump in the dividend payout.

A 2013 high-flier

JB Hi-Fi’s poor share price performance so far in 2014 could well be to do with its terrific return in 2013. JB’s shares rose from a low of $15 in May 2013 to hit $22.80 in November as retail stocks outperformed ahead of an expected boost in retail spending. The boost largely didn’t happen, but that underscores just how impressive JB’s numbers were.

2014 results preview

JB Hi-Fi is expected to deliver a trading update in early May which will set the scene for its full year results in August. The current company forecast is a net profit of between $126 and $129 million, an 11% increase on FY13. Current analyst forecasts are for JB Hi-Fi to slightly outdo that forecast, with the mean analyst predicting net profit of $129.5 million.

Analysts have taken solace from the fact that the retailer should benefit from the sale of newly released Xbox and Playstation consoles, as well as a higher proportion of higher-margin non-Apple products in the tablet and phone segments.

Finally, analysts have noted that the impressive quarterly results from Dick Smith Holdings Ltd (ASX:DSH) of 2.4% like-for-like sales growth in the March quarter, and a 3% target in the June quarter should translate to similarly impressive numbers for JB Hi-Fi.

Foolish takeaway

It’s a bit early to say that JB’s is Australia’s best listed retailer, however if analyst forecasts and commentary are to be believed, it is certainly a stock that could outperform in the next three to six months. The most impressive factor, in my view, is that JB’s has successfully navigated the downsides of a higher Australian dollar relatively unscathed. It is developing new initiatives and store formats which should ensure sales continue to rise in the future.

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Motley Fool contributor Andrew Mudie does not own shares in any companies mentioned. You can find Andrew on Twitter @andrewmudie

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