Harvey Norman Shares Up 7% On Sector Confidence
Shares in Harvey Norman have rallied over 7% just after midday, with investor confidence seemingly bolstered by a positive H1Y21 outlook from rival furniture retailer Nick Scali.
Harvey Norman shares have climbed 7.47% to $4.03 just after midday, after being one of the best performing stocks in the S&P/ASX 200 in morning trade.
Earlier today, Nick Scali forecast a 50% – 60% lift in first-half 2021 profits [with Melbourne closures factored], also increasing its final dividend by 12.5% to 22.5 cents per share.
It comes after the retailer reported flat full-year results – net profit of $42.1 million – with coronavirus shutdowns to cost around $9 million – $11 million in sales. Full-year revenue slipped 2.1% to $262.5 million.
The unchanged profit was above its prior guidance of $39 million – $40 million.
Nick Scali states it has fared a notable rebound in customer orders as restrictions ease, with sales continuing into July.
Managing Director, Anthony Scali, states the furniture sector has witnessed record year-on-year growth, with home-bound consumers investing in interiors amidst the coronavirus pandemic.
Following the interim closure of stores around April and May, May and June sales orders soared 72% year-on-year.
July trading remained strong, with written sales orders up 70% versus the same time last year.
“As approximately 65 percent of Nick Scali’s products are made to order with typical delivery lead times of 9-13 weeks, the recent strong order intake performance means the company’s opening order book for 2021 is significantly higher than in previous years,” said the company.
The company has announced it hopes to open two new stores in the first half of 2021 – NSW and New Zealand – and is focused on pursuing a target of around 80 – 85 stores.
Consumer electronics retailers have notched a similar trend in home improvement during the coronavirus pandemic, as reflected in JB Hi-Fi and Kogan.com results.