Suppliers have suspected it for some time, but the latest financials revealed by Harvey Norman show that sales have slumped during the last quarter up to 13.9% in comparison JB Hi Fi only reported a 1% decline.
pre-tax profits have also halved in the first three months as sales momentum deteriorated quickly due to the business having an ageing audience who are also technology dyslexic resulting in them not using the Companies online. operation.
Same stores sales were down 10% in the period, while comparable sales at the Companies Australian franchisee owned stores tumbled 13.9%.
Overall sales were down 9.1%.
While JB Hi Fi sales in New Zealand were up Harvey Norman sales were down 3.3 per cent.
ChannelNews understands that JB Hi Fi is stripping Harvey Norman customers away from Harvey Norman stores because they are seen as being where “mum and dad shop” said one observer.
Malaysian same store sales fell 8.4%
The company run by Gerry Harvey and his wife Katie Page said it would buy back up to 10 per cent of shares, or some $442 million, amid a slump in the share price in the last month.
The business expects to commence the buyback in November and complete it within 12 months.
“The board of Harvey Norman believes that the buyback is an appropriate capital management strategy, particularly recent share price history,” it said in their ASX statement.
On the positive side the business was positively affected by an appreciation in the Euro, British pound, the New Zealand dollar as well as the Singaporean dollar.
Harvey Norman said based on its preliminary unaudited accounts profit before tax and non-controlling interests is 49.1 per cent lower to $86.23 million compared with $169.45 million a year ago, excluding the impact of property revaluations.
Investors moved quickly to sell the company’s shares today after the announcement the massive share buyback.
Margin pressures have also been weighing on the company’s performance, this has led to its earnings falling at a much quicker rate with recent discount sales failing to deliver customers
Based on yesterday’s closing share price, the cash cost would be approximately $442.3 million for the business.
ChannelNews understands that cooler than usual temperatures on the east coast dented sales of air conditioning units, fans, outdoor furniture and barbecues over the second half of last financial year and that the business is still struggling with high stock levels.
