There are 3 methods to update the theme:
- Manually via WordPress admin: After downloading the package from Themeforest, you can delete the old theme and install the new theme. All your settings with our theme will be preserved but it sometimes results in losing Menu or Widgets settings because this method actually switches on/off the menu and widget location which has been registered by this theme.
- Manually via FTP: After downloading the package from Themeforest, you can extract it and using FTP client like FileZilla to remove the old theme and upload the new theme. With this method, all your settings, including the menu and widget will be persevered.
- Using Envato WordPress Toolkit introduced on this link: http://premium.wpmudev.org/blog/how-to-update-themeforest-themes-with-the-envato-wordpress-toolkit/. This is the plugin developed by Envato to auto update WordPress theme bought in Themeforest.