Harvey Norman’s profits fall as consumers tighten their belts

Harvey Norman saw profit fall 15 percent as rising pressures on the cost of living hurt consumer spending, but the company said it was optimistic about weathering the challenging conditions.

The ASX-listed homewares and electronics retailer reported net income of $365.9 million for the six months ended December, down 15.1 percent from the same period last year. However, compared to the same period in 2020, before the pandemic began, revenue has increased by 71.3 percent.

Harvey Norman chairman Gerry Harvey said that despite the difficult economic conditions, the company remained focused on sustained growth and continued its business improvement strategies during the half-year.

“Amid the macroeconomic headwinds of the past year, we have grown our integrated retail, franchise, real estate and digital businesses across eight countries to nearly $5 billion in systems sales for the current half-year period,” he said in a statement released at the was submitted to ASX on Tuesday morning.

Retail analysts will be scouring the company’s numbers, with the electronics and furniture giant’s performance seen as a strong indicator of consumer sentiment at a time when shoppers are expected to be more cautious about big ticket purchases.

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In a trading update for January, Harvey Norman said sales at Australian franchise stores were down 10.2 percent compared to January 2022, while sales in New Zealand were down 8.1 percent.

“Despite the macroeconomic headwinds and cost of living pressures affecting discretionary retail, our strong balance sheet and significant net asset growth during the pandemic have placed us in a solid position to weather these challenging circumstances,” the company said.

Harvey Norman declared an interim dividend of 13 cents per share, compared to 20 cents at the same time last year, payable May 1st.