Harvey Norman profits halve as first quarter sales slump
Harvey Norman, Australia’s largest white goods and home retailer, says pre-tax profits have halved in the first three months of the new financial year as sales momentum deteriorates faster than the market expected.
The company intends to buy back up to 10 per cent of its shares, or $442 million, following the poor sales update and amid a slump in the share price in the last month.
Harvey Norman, run by executive chairman Gerry Harvey and his wife, chief executive Katie Page, flagged that sales at their stores in Australia and overseas, and franchised Harvey Norman, Domayne and Joyce Mayne sites, fell by 9.1 per cent in the quarter to September 30.
Harvey Norman executive chairman Gerry Harvey and CEO Katie Page have flagged an on-market buyback. Janie Barrett
Mr Harvey said foot traffic in the company’s stores was down by between 20 and 25 per cent, and sales were falling more than he anticipated.
“If we are down that much so are most other retailers,” he said. “Sales are down probably more than I thought they’d be. But we’re fairly confident we’ll have a reasonable October, November, December. The indications are it’ll be okay. And then January to June, we have no idea.”
Mr Harvey said while bed and lounge sales were the worst affected, revenues had fallen across the business.
Regional stores were performing better than those in capital cities, he added, and families were prioritising travel over home goods. “People were buying a fridge, and now they are taking a trip to Bali,” he said.
The international stores in New Zealand, Slovenia, Croatia, Ireland and Northern Ireland, Singapore and Malaysia, were aided by foreign exchange rates. The surprise update came well ahead of its planned annual meeting set for November
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