Harvey Norman Profits Take a Tumble

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By Published On: November 24, 20210 Comments

Harvey Norman is reporting a slump in sales and profits, highlighting the effect of lockdowns on the retailer, and warning of potential future uncertainty as a result of the pandemic.

A slump in profits has hit Harvey Norman in its recent financial results, dropping 35.5 percent in the period from July to October 2021. Unaudited preliminary results indicated that profits before-tax and non-controlling interests were $217.42 million, compared to $337.11 million. Furthermore, its aggregated sales for the July to November 2021 period was also down 8.8 percent on PCP.

But its results are far better than pre-pandemic levels. In comparison to the same period in 2019, sales revenue is up 16.9 percent. Similarly, profits before-tax and non-controlling interests are up 70.1 percent compared to the same period two years ago.

According to the retailer, the lockdown measures throughout the period in Australia majorly affected the retailer’s sales in this period. Even with e-commerce and Contactless Click & Collect available to consumers, the retailer said more than 15 million, or about 58 percent of the Australian population, were in lockdown from July, thus impacting sales.

vai Harvey Norman

Despite Click & Collect services available, it didn’t salvage sales during lockdown | via Harvey Norman

“The COVID-19 pandemic has caused, and continues to cause great uncertainty about the future economy,” the retailer said.

The retailer also explained that the depreciation of currencies in operating countries has also negatively impacted sales. The retailer indicated that a 1.7 percent depreciation of the Singaporean dollar, a 2.9 percent of the Euro, 2.9 percent depreciation of the Malaysian Ringgit. However, this was offset by a 2.7 percent appreciation of the New Zealand dollar and a three percent appreciation of the UK Pound all made a major influence on sales.

Sales were down -11.1 percent in Australia and -5.7 percent in New Zealand in the period ending October 31 2021. Malaysia’s sales were the worst, dropping 24.6 percent due to ongoing lockdowns across the country. At the time of writing, Harvey Norman’s shares have dropped 2.41 percent to $5.06 – since the beginning of 2021, the retailer’s share price has lifted 8.5 percent.

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