Has Harvey Norman Revenues Started To Slump? Their Shares Have
Has Harvey Norman revenues slumped, following the ill-fated appearance of Chairman Gerry Harvey on 60 Minutes, who after bragging about his recent spurt in growth and how he planned to capitalise on the outbreak of the Coronavirus epidemic is now moving to cut salaries, stop dividends and work out how to get stock onto his stores shelves.
Across Twitter, #boycottharveynorman has been trending as consumers reveal their outrage for his comments.
Poor Harvey Norman CEO Katie Page the wife of Chairman Gerry Harvey is set to see her take home pay fall by 20% for the next three months from around $3.5M to approximately $2.8M.
As for those poor shareholders who are going to lose out on $148M in lost dividends they are facing a bigger uphill battle with the share price down 32% in the last 90 days.
What was missing from last Thursday’s late announcement to the ASX was any mention of how revenues have performed during the past 7 trading days and for Harvey Norman this is very unusual as they normally like to spin a positive yarn around a bad announcement.
During the past five years shareholders in Harvey Norman Holdings Limited (ASX: HVN) has seen the stock fall 36% over the past half-decade.
There are some good news revenues have actually increased by 7.5% a year in the five-year period so that Directors such as John Slack Smith and David Ackery can continue taking home their multimillion-dollar salaries.
While the broader market lost about 15% in the twelve months, Harvey Norman Holdings shareholders did even worse, losing 18% wrote Motley Fool recently.
They said Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 0.8% per year over five years.
In a recent newsletter subscriber were told ‘We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high-quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important’
They concluded ‘Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with Harvey Norman Holdings, and understanding them should be part of your investment process’
One person who does believe in his own stock is Gerry Harvey who bought $2 million of Harvey Norman shares at the beginning of the market rout, at about $3.20 per share.
At the time he picked them up because he thought they were a “bargain”, but admitted his timing was wrong as the stock later dropped as low as $2.46. This is the same guy who bought a dairy farm and 18 months later saw its value fall by over $150M.
Gerry Harvey, who owns 32 per cent of Harvey Norman, said directors across all public companies should buy shares during the market downturn if they could.
“If you’re in a position where you’re a director and you think you’re in a good company, I think it’s a good time to buy,” he said. Harvey Norman shares closed at $2.81 on Friday.