By Sherin Sunny

Feb 10 (Reuters) - JB Hi-Fi JBH.AX posted an 8% rise in its first-half profit on Monday, aided by strong sales across its operations, though shares retreated from all-time highs as the market's attention shifted to the decline in the retailer's gross margins.

Shares of the consumer electronics retailer were down 3.2% at A$3.2 by 0126 GMT. Earlier in the session, stock rose as much as 5.5% to a record high of A$108.08.

The company's net profit after tax for the half year ended December 31 rose to A$285.4 million ($178.52 million), up from A$264.3 million a year earlier. This was above Visible Alpha's consensus of A$278.3 million.

The company's half-yearly gross margin declined by 17 basis points to 21.8% for its Australia operation on gross margin mix and increased competitive activity and by 25bps for its unit, The Good Guys $(TGG.AU)$.

Citi predicts a decline in share prices due to weak gross margins but expects positive sales in January to help limit the losses.

Sales for January from JB Hi-Fi Australia rose by 7.1% while that of TGG climbed 5.9%.

"We consider this a strong update given concerns of a pull-forward of sales into the key promotional events of Black Friday and Boxing Day," Citi said in a note.

The electronics retailer announced an interim dividend of 170 Australian cents apiece, compared with 158 AU cents per share a year earlier and slightly below Citi's expectations of 176 AU cents.

JB Hi-Fi is the first among Australian discretionary retailers to issue its half-year results, with competitors Harvey Norman HVN.AX and Super Retail SUL.AX scheduled to report later in the month.

Analysts expect Australian discretionary retailers to benefit from a potential reduction in interest rates this year.

High borrowing costs have made consumers more cautious about spending during the ongoing cost-of-living crisis, putting pressure on retailers.

($1 = 1.5987 Australian dollars)

(Reporting by Sherin Sunny in Bengaluru; Editing by Sherry Jacob-Phillips)

((Sherin.Sunny@thomsonreuters.com;))