Despite a tough retail environment, JB Hi-Fi has managed to post surprisingly strong profit growth, beating market expectations and its own forecasts.

Key points: JB Hi-Fi lifted its final dividend to 51 cents per share

JB Hi-Fi lifted its final dividend to 51 cents per share Its results were boosted by mobile phones and computer sales, which offset weaker movies and music sales

Its results were boosted by mobile phones and computer sales, which offset weaker movies and music sales Most of the $249.8m profit was driven by its Australian stores

The electronics retailer's full-year profit rose 7.1 per cent to $249.8 million, boosted by Australian consumers taking advantage of end-of-tax-year promotions.

Its revenue, for the 12 months to June 30, increased by 3.5 per cent to $7.1 billion, with its Australian stores being the stand-out performers.

The result was also driven by strong sales of mobile phones, computers, audio equipment, video games, smart home devices and fitness trackers.

"It was a solid result for JB Hi-Fi Australia and a particularly pleasing finish to FY19 [the 2019 financial year] with strong sales in the key tax-time promotional period," the company's chief executive Richard Murray said.

Solid sales in those categories helped offset weaker demand for movies and music, which experienced "double digit declines" across its Australian store network.

Australian stores were the best performers

The initial excitement about JB Hi-Fi's results propelled its share price to a record high in early trade, up 13 per cent to $31.60.

By 12:40pm (AEST), its shares were 7.4 per cent higher at $30.04, but it remained the best performer on the benchmark ASX 200 index.

Shareholders will receive an upgraded final dividend on the back of these results, up 11 per cent to 51 cents per share.

This takes the company's full-year dividend to $1.42 per share, fully franked.

JB Hi-Fi's Australian online sales experienced rapid growth, jumping 23 per cent to $258 million, or 5.5 per cent of total sales.

Overall, the total sales from its Australian stores (online and in-store) lifted 4.1 per cent to $4.73 billion.

Its New Zealand stores showed signs of improved sales, but were lacklustre in comparison — up 2 per cent to $NZ236.2 million ($225m).

Online sales in New Zealand were also a strong performer — surging 38.3 per cent to $NZ$13.3 million ($12.7m), representing 5.6 per cent of total sales.

Meanwhile, The Good Guys stores — which JB Hi-Fi acquired in an $870 million takeover in 2016 — also enjoyed solid results.

Total sales for the whitegoods chain rose 2.2 per cent to $2.15 billion, with fridges, laundry, dishwashers, TVs and computers being the key growth categories.

What retail recession?

JB Hi-Fi's profit was stronger than what is expected from companies in the struggling retail sector.

Official retail sales figures remained weak in May and June — up 0.1 and 0.4 per cent respectively. That was despite the Government's $158 billion income tax cuts and the Reserve Bank's two consecutive interest rate cuts,

Sales of electrical goods lifted by a solid 1.1 per cent in June, while household good sales only rose by a marginal 0.2 per cent.

But retail volumes were particularly weak, rising by just 0.2 per cent over the 12 months to June.

Westpac economist Matthew Hassan said these anaemic volumes were "weaker than in the GFC [global financial crisis] and the weakest since the early-90s recession".

Before JB Hi-Fi announced its better-than-expected earnings, the last retailer to give a trading update was troubled department store David Jones.

Earlier this month, the owner of David Jones — South African-listed retailer Woolworths Holdings — was forced to write down the value of its Australian department store chain by a further $437 million.

Woolworths blamed "onerous leases" in shopping centres amid a "retail recession".

Furthermore, amid record household debt and consumers holding back on spending, NAB said the retail sector was "clearly in recession", according to its recent business confidence surveys.