SYDNEY/BENGALURU (Reuters) – Australian No. 2 electronics chain JB Hi-Fi Ltd defied a gloomy retail market by posting an annual profit that beat forecasts, sending its shares to a record high amid hopes it would benefit even further from recent economic stimulus.

The strong result on Monday showed the company could weather a downturn hurting most of the country’s bricks-and-mortar retail sector, due to its focus on popular internet-connected gadgets and recent takeover of a household appliances chain.

Melbourne-based JB Hi-Fi said underlying net profit rose 7% to A$249.8 million ($169.4 million) for the year to end-June, surpassing the top of its own guidance of between A$237 million and A$245 million.

Devices like smartphones and fitness trackers led sales higher, while growth in sales of software and gaming hardware offset heavy declines in music and movie DVDs.

JB Hi-Fi shares rose as much as 13% in a flat overall market to be trading at record intraday highs by mid-afternoon. Shares of larger rival Harvey Norman Holdings Ltd also rose 3%.

Australia’s retailers have been among the worst affected by a once-in-a-generation housing downturn that has prompted the central bank to cut interest rates twice, and analysts had forecast earnings misses in the current reporting season.

JB Hi-Fi’s profit was “a commendable result…in a challenging consumer backdrop”, Macquarie Group analysts wrote in a research note.

The company stands to benefit this year from a surprise conservative election victory in May, just before the end of the last financial year, which quelled concerns about an end to tax breaks proposed by the opposition Labor party, Macquarie said.

Interest rate cuts and relaxed lending rules for banks designed to boost consumer spending also took effect at or after the financial year cut-off.

JB Hi-Fi did not give a profit forecast for the 2020 financial year but said it expects sales would grow 2% to around A$7.25 billion, slower than the previous year’s growth of 3.5%.

“Whilst we continue to see variability in the sales environment, we enter FY20 confident in our ability to execute and grow market share,” Chief Executive Richard Murray said in a statement.

The final dividend took the full year’s payout to 142 cents per share, up 10 cents on the previous year.