JB Hi-Fi's (ASX:JBH) massive special dividend could not disguise the weakest trading performance in four years for the 2023-2024 financial year—since 2020 and the start of the pandemic. However, it wasn't truly needed given the upbeat news about the retailer's strong trading in the first month of the new financial year.

That trading update sent shares to a new all-time high of $74.66 on Monday. They later retreated from their earlier surge to trade more than 8% higher at just over $73 in the mid-afternoon.

In fact, the 80 cents per share special payout ended up as a pleasant reward for shareholders after a full-year result that was weak in the December half, as expected, but improved by June 30, which was unexpected given the massive squeeze on consumer spending overall.

The improvement, though small in the second half, saw a slight rise in gross margin, indicating the company eased back on discounting in the June half.

However, investors quickly caught on to the strong trading news update at the end of the ASX filing.

JB Hi-Fi's December half revenues fell by 2.2%, but this was reduced to a drop of just 0.4% by the end of June, totaling $9.6 billion. Meanwhile, earnings were down 19.9% at the end of December but improved slightly to a fall of 16.4%, or $438.8 million, by the end of June.

But management then revealed that the first four weeks of the new financial year had seen sales grow 5.6% for JB Hi-Fi Australia (5.2% in comparable terms), 12.2% in New Zealand (down 4.9% in comparable terms), while sales at The Good Guys were up 2.7% in both headline and comparable store basis.

Group CEO, Terry Smart, said, "It is pleasing to see sales momentum in Australia continue into July. We remain committed to offering the best value and exceptional customer service to maximize our brands' sales opportunities."

The strong start to the new financial year had a more significant impact on the share price than the special dividend, with shares surging to an all-time high of $74.66 in early trading.

The one-off special payment to shareholders will more than offset a substantial cut to the ordinary dividend for 2023-2024.

The board slashed the final dividend to $1.03 per share, down 12 cents or 10.4% from the final dividend for 2022-2023.

This resulted in the total ordinary payout for the year falling to $2.61 per share, a cut of 16.3%. With the 80 cents, the total distribution to shareholders will be a record $3.41 per share. Considering the approximately $5.70 increase in the share price, shareholders found themselves more than $9 per share better off yesterday.

In fact, part of the justification for the extra payout was a large pool of available franking credits and "continued strong financial performance and cash flow generation." The slump in profits for the year on static sales revenue growth was unstated.

The extra 80 cents per share disguises the 16% plus fall in the full-year ordinary dividend to its lowest level since 2020.

While weak, the results were better than they appeared at the halfway mark as JBH management drove sales growth (similar to rival Harvey Norman) with much of the spending occurring online.

Total sales in JB Hi-Fi Australia (the company's engine room) increased by 1% over the year to $6.61 billion—at the December halfway mark, they were up 0.7%.

Gross profit was down 3% at the halfway mark but improved to a fall of just 0.9%. The gross margin edged up to 22.2% by the end of the year from 22% in December, an encouraging sign.

EBIT in Australia fell 11% for the year, which was better than the 13.7% at the December halfway mark.

New Zealand saw higher sales and gross earnings as the company repositioned the operation, but EBIT was a loss as costs rose nearly 12%.

And The Good Guys was the black mark—sales down 4.7% for the year, half the 9.9% slump at the halfway mark. The decline in home construction and reluctant consumer spending made life tough for the whitegoods chain. But reporting positive sales growth—even for a month—is a significant change from the 2023-2024 experience.