BREAKING NEWS: Harvey Norman Profits Fall 36% Revenues Down 9.6%
The first signs that CE retailers are facing problems was revealed today with Harvey Norman reporting a 36% fall in profits and a 9.6% fall in revenue for the past quarter, which some claim begs the question why retailers are discounting products that are in short supply with Black Friday discounts.
Harvey Norman sales revenue crashed 9.6% for the period 1 July 2021 to 21 November 2021 when compared to aggregated Sales for the period 1 July 2020 to 21 November 2020.
Since the company released its trading update, shares have fallen 5.6 per cent, to a five-week low of $4.90.
Directors claimed that sales were affected by fluctuations in currency which saw a 2.9% depreciation in the Euro (€), a 1.7% depreciation in the Singaporean dollar ($SGD) and a 2.9% depreciation in the Malaysian Ringgit (MYR) offset by a 2.7% appreciation in the New Zealand dollar ($NZD) and a 3.0% appreciation in the UK Pound (£GBP) over the same period.
The retailer delivered profits of $217.42 million compared to $337.11 million for the period 1 July 2020 to 31 October 2020, a decrease of approximately -35.5%.
The fall in sales which is being contributed to a lack of stock and a slowdown after lockdowns is now affecting Harvey Norman’s profitability with analysts tipping that the problems for CE and appliance retailers could get worse.
The latest fall in profits compares to $127.8m for the four months to October 2019.
In August, Harvey Norman reported a 75 per cent jump in annual net profit to $841.41m, thanks to a near 15 per cent rise in revenue to $9.72bn.
During the current period, two new franchised complexes were opened in Murwillumbah, New South Wales (opening delayed to September 2021 due to NSW lockdowns) and in Port Pirie, South Australia (opened 11 November 2021). There were no new company-operated store openings or closures in overseas regions.