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Reporting Season 31st August 2022

Harvey Norman NPAT slides 3.6% on COVID impact | Harvey Norman (ASX:HVN)

Australian-based furniture and electrical appliances retailer Harvey Norman (ASX:HVN) released its FY22 results this morning, with Chairman Gerry Harvey and Chief Executive Katie Page saying the company’s profits had been significantly impacted by government mandated lockdowns in the first half of the year.

For the year, Harvey Norman reported EBITDA fell 1.4% from FY21 to $1.437 billion, NPAT fell 3.6% to $811.53 million, total sales revenue fell 1.7% to $9.558 billion, and announced a fully franked final dividend of 17.5 cents per share.

The retailer made note of a strong recovery in performance with EBITDA up 0.7% in H2 of FY22, and NPAT rose 0.3% in the second half of the financial year.

In terms of outlook for FY23, no quantitative guidance was released for FY23 however Harvey Norman expects to ramp-up offshore expansion plans with the anticipated opening of a further 4-company operated stores during the new financial year. The company also noted the start of FY23 has seen solid sales results, as low unemployment and high net deposit rates continue to underpin growth.

The retailer also noted the franchises are well-placed to benefit from any unwind in built-up household savings as they predominantly service the middle-to-upper product markets, and are expected to benefit from the sustained investment in the home as devices and appliances require replacement and upgrade.

Brokers are yet to respond to the results, however some investors are selling-off Harvey Norman shares today following the release of the results, with HVN shares trading almost 0.7% lower at 11am Australian Eastern standard time.