Harvey Norman profits slip: bushfires, weather to blame

By AAP | 02 Mar 2020 View comments

Harvey Norman blames bushfires and extreme weather for a subdued Christmas period as the retailer’s first-half profit slipped by 4.0 per cent.

The furniture and electronics firm also warned on Friday it was bracing for a coronavirus hit to consumer confidence, though the Gerry Harvey-chaired firm refrained from offering solid guidance until the threat is understood and mitigated.

Harvey Norman reported a net profit of $213.59 million for the six months to December 31, with its overseas ventures outperforming local operations.

Revenue from local franchisees, which include the Domayne and Joyce Mayne stores, was down 4.2 per cent to $497.84 million.

The group has 544 franchisees in Australia, and 194 franchised complexes.

The bushfires which ravaged Australia over the summer, as well as drought and severe storms, all contributed to keep people from spending.

Some stores in regional areas closed temporarily.

Harvey Norman overseas

However, company-operated sales revenue, which includes 95 overseas stores was up 5.4 per cent to $1.24 billion.

The company trade in countries including Croatia, Singapore and Slovenia and opened five new stores in Malaysia during the first half.

Sales improved in all regions.

The biggest improvement came from the 15 stores in Ireland and Northern Ireland, where sales rose by 12 per cent to $249.08 million.

Harvey’s 39 New Zealand stores contribute the most profit from the international operations.

They provided a 16 per cent gain to $48.80 million.

Harvey Norman declared interim dividend at 12 cents per share, fully franked, the same as last year.

Its shares were trading lower by 9.49 per cent to $3.91 at 1146 AEDT.

Harvey Norman key figures

  • Profit down 4 per cent to $213.6 million
  • Revenue from franchisees down 4 per cent to $497.8 million
  • Revenue from company-operated stores up 5 per cent to $1.24 billion
  • Interim dividend unchanged at 12 cents per share, fully franked

This article first appeared on Inside Retail, a sibling website to Inside Franchise Business.