Harvey Norman Q1 profit slides, sales drop

The news: White goods retailer Harvey Norman has seen its first-quarter sales contract and profit dive amid a slowdown in consumer spending.

The numbers: The retail giant said its profit after tax for the three months to September 30 was down 49.1% to $86.23 million. Aggregate sales revenue declined 9.1% in the quarter, primarily on account of a 13.6% drop in revenue from the group’s Australian stores.

The context: The poor quarter follows a weak performance in FY23, when the retailer suffered a near one-third drop in its full year earnings and cut its dividend. Chairman Gerry Harvey had flagged inflationary and other challenges at its results in August as consumers rein in spending in a high-interest, high-inflation environment. The company has however, reported strong sales growth in Ireland and Singapore, and opened three new stores in Malaysia during the quarter.