Retailer JB Hi Fi has posted a 9.4% drop in first half net profit but its shares climbed with the company expecting a 5% increase in full year sales.

Net profit for the six months to December 31 was $79.6 million, compared to $87.9 million in the previous corresponding period.

Revenue rose 5.5% to $1.77 billion.

Earnings before interest and tax (EBIT) were $120.7 million, down 4.9% from $127.0 million, in line with the company's guidance.

JB Hi-Fi declared a fully-franked interim dividend of 49 cents.

The company said assuming second-half trading conditions are comparable with the first half it expects full-year sales will be up 5% at $A3.1 billion. January sales were weak but improved in February.

“While it has been a tough start to the year, we expect sales to improve as we cycle out the heavy promotional period of post-Christmas and New Year sales,” the company said.

“In our view, consumers were suffering from 'promotional fatigue' and therefore have not reacted as well to our post-Christmas promotional offers as in previous years.”
JB Hi-Fi shares initially jumped by 56 cents, or 4.7%, to $A12.55 on the ASX in early trading before easing back to about $12.30.

New Zealand stores return to profitability

New Zealand sales jumped 28% to $NZ124.9 million while earnings before interest and tax rose to a $NZ2.2 million profit from a loss of $NZ1.1 million in the same six months a year earlier.

"We are getting good traction with the JB Hi-Fi brand resonating with the New Zealand customer," the company said.