JB Hi-Fi is off to a cracking start, more than 9 per cent higher in early trade.
At 10.23am it was up 9.3 per cent, climbing $1.40 to $19.90.
This morning the company updated its sales and profit guidance for for full year 2013.
Now JB Hi-Fi expects there to be around $3.3 billion in full year sales, and its after tax profit to between $112-116 million.
While two and three per cent moves in consumer discretionary stocks are common, “when you start to see a nine or ten per cent move, that’s when you get excited,” IG Markets strategist Evan Lucas told Business Insider this morning.
There could be a few investors looking to cover their positions today, after the solid result from a company that has for months been the number one held short.
While 18.65% of the company’s share register is held in a short positions, this is likely to unwind now.
“The shorters are finally starting to wake up,” Lucas said.
Before today the company was expecting sales to be around $3.25 billion and profit to be between $108-112 million.
The update comes after better-than-expected sales growth in Australia and New Zealand for the four months ended 30 April this year.
“They are seeing strong demand from Australia. They are really starting to get themselves into gear,” said Lucas.
JB Hi-Fi’s strong result, Lucas explained, is a result of its emphasis on high-turnover stores with cheap products paying off.
“It’s [JBH] really starting to get its stores in order and its what everyone wants. It’s finally starting to show that structurally, it’s working,” he said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.