By Aimee Chanthadavong

JB Hi-Fi expects its full year profit of 2011 to be in the range of $134 to $139 million, which is a 13 to 17 per cent increase on the prior year.

This announcement follows a record half year net profit of $87.9 million from $1,683 billion of sales for the six months ending 31 December 2010, with total sales up by 8.3 per cent.

CEO Terry Smart told Retailbiz that while the company was trading in a difficult retail environment, increasing its store product offerings assisted in absorbing the reduction in sales of flat panel TVs, games, the Ninetendo Wii, Nintendo DS and Sony PSP.

“We continued to expand our categories with product offering particularly in the computer, Telco and accessories category,” he said.

The group’s everyday low price strategy supported by its low cost of doing business and benefits from improved scale also ensured the positive outcome.

JB Hi-Fi saw its online sales grow 35 per cent over the half year and was up 49 per cent in December.

Smart said its online presence is an important part of the company’s overall strategy.

“We’ve had our online business for seven to eight years now and it’s always been part of the business. What we want to make sure we do is that we stay in step with our customers and remain relevant and if it means buying online we want to service that. It’s part of our strategy to maximise potential that exist from our online store,” he said.

“While it’s a growth, our online business is still a very small percentage with a good solid growth and we’re very pleased with that.

“With our online business strategy it is an extension of our store and what we make sure what we do is that it’s there for researching and there to help people make decision before they come into the stores or decide to buy online.”

The company said sales in the first five weeks of the second half was challenging as consumer spending remained subdued.

“Sales since the start of January have remained tight as high levels of discounting and the impact of price deflation continued. Whilst we anticipate a volatile and competitive market in the second half, we are confident that the JB model can deliver another record year of sales and earnings.”