Shares in Harvey Norman have plunged 8%, wiping more than $550m off the company’s market value, despite what management insists was a “stellar” half-year result delivered in challenging market conditions.

By 2.20pm, the retailer’s stock had slid to $5.84, triggering a sharp rebuke from chairman Gerry Harvey, who accused investors and analysts of failing to understand the company’s unique business model.

Retailer or Property Giant?

Harvey Norman reported interim sales of $5.161bn, up 6.9%, while net profit rose 15.2% to $321.91m for the half-year to December 2025.

Underlying profit, however, came in at $373m — just shy of analyst consensus forecasts of $380m — a miss that appears to have rattled the market.

Harvey maintains the company is being judged too narrowly as a retailer, rather than as a hybrid retail and property operation.

“If you look at Harvey Norman, we are not just a retailer of goods, we are a property owner and that is a big percentage of our profit every year,” he said.

Harvey Norman’s debt isn’t worrying – as long as there are no unpleasant surprises

As at 30 June 2025, the group’s freehold property portfolio was valued at $4.53bn, spanning investment properties across Australia, Ireland and New Zealand, as well as owner-occupied sites. The portfolio — largely large-format retail complexes anchored by Harvey Norman, Domayne and Joyce Mayne stores — generated $178.82m in profit before tax for the half, up 7.8%.

Harvey conceded the market tends to see the company primarily as a retailer rather than a multi-billion-dollar property owner.

“I don’t know if we are misunderstood, but we are not recognised enough,” he said, pointing to offshore expansion as a future growth driver.

Analysts Unconvinced

The sell-off suggests investors were focused less on property revaluations and more on retail momentum.

A January trading update showed sales growth of 3.6% — trailing rival JB Hi-Fi, which posted 4% growth over the same period. Analysts had been forecasting 5.7% sales growth for Harvey Norman, despite industry suppliers warning that forward orders had been cut in January amid softer demand.

Earlier this month, JB Hi-Fi reported half-year sales of $6.10bn, up 7.3%, with net profit after tax rising 7.1% to $305.8m. Its Australian business posted 6.3% sales growth, while New Zealand sales surged 32.6% in local currency. The Good Guys chain recorded 4.1% growth.

Even so, JB Hi-Fi shares were also weaker on the day, down 4.04% to $82.42, underscoring broader investor caution toward the discretionary retail sector.

AI Bet and Billionaire Hit

Harvey argued the company is well placed to benefit from the rise of artificial intelligence-driven consumer products.

“With the advent of AI we are a big seller of product that has AI, whether that’s computers, washing machines, or vacuum cleaners or whatever it might be,” he said.

According to Forbes, Harvey’s net worth is estimated at around $5.6bn as of early 2026, largely tied to his stake in the company. Friday’s share price fall has shaved millions from that figure.

For now, the message from investors appears blunt: solid growth is no longer enough. In a retail market facing patchy demand and elevated expectations, even a near-miss can erase half a billion dollars in hours.