Harvey Norman’s revenue falls on softer property yields, lower franchise fees

Harvey Norman revenue falls

Harvey Norman’s net profit fell amid lower revenue in the fiscal first half as large format retail property yields softened and franchise fees declined.

The furniture and electronics retailer’s attributable net profit plunged 45.3 per cent to $200.01 million as revenue slid 8.2 per cent to $2.15 billion.

Franchising operations segment revenue fell 14 per cent to $511.81 million while overseas company-operated retail segment revenue went up 0.9 per cent to $1.4 billion. Property segment revenue stood at $160.62 million, down 37.7 per cent.

“We are well-positioned to benefit from growth in the homemaker categories and an improvement in residential property activity,” said Harvey Norman chairman Gerry Harvey.

“We remain committed to our Malaysian expansion plan and it is still our intention to grow to 80 stores by the end of 2028. We continue to source suitable locations overseas to strengthen our global footprint and are excited by the expansion of the brand in the UK with the opening of the Harvey Norman Merry Hill flagship store in England later this year.”

The company said it is on track to open three additional company-operated stores in Malaysia in the fiscal second half and aims to open 12 new stores in the Southeast Asian country next fiscal year.

In Australia, Harvey Norman intends to open two new franchised complexes next fiscal year.

It is also on track to open two new full-format stores in Papanui and Ravenswood in New Zealand in the first half of the next fiscal year.

However, the company is experiencing delays with the planned opening of stores in Croatia and Budapest, Hungary next fiscal year due to difficulties in locating suitable sites and negotiating with potential landlords.

This article was first published on sibling website Inside Retail.