COVID Spending Catapults Harvey Norman Sales Higher

Another very strong sales and profit update from leading retailer, Harvey Norman.

The company yesterday revealed double-digit growth through the first quarter of 2020-21 as consumers continue to spend heavily.

Harvey Norman said on Monday that sales from July 1 through to September 17 jumped 30.6% on the same period of 2019-20.

Comparable store sales across the group’s stores here and offshore rose by 30.3%, a very strong result.

Profit before tax for July and August also rose significantly, coming in at $178.1 million nearly treble the $62.3 million in the same period of last year.

Unlike the result in the final months of 2019-20, the latest surge in sales and profit was helped by a rebound at the company’s international locations, especially in Europe.

Harvey Norman said sales in Slovenia and Croatia rose 27.2%, and sales in Ireland jumped 61.7%.

Australian sales jumped 33.8% for the period despite 18 stores in Melbourne being shut from August 6 thanks to the state government’s stage four lockdown restrictions.

Comparable store sales were up 34.5% (a more accurate measure of sales performance)

New Zealand sales also rose 18.8%, despite a similar but much briefer lockdown in Auckland.

Mr. Harvey repeated comments made at the August earnings release, saying this sort of rise had “never happened in my lifetime”. He told the media he thought the booming sales globally were because consumers have limited opportunities to spend and taking the opportunity to spruce up their homes.

“People can’t spend their money on other things anymore, so they spending time upgrading their home,” he said. “And that’s happening right across the world.”

“There’s also been so much money thrown into these economies, and because they can’t spend it [elsewhere], we’re getting the advantage of that. We’re in a very fortunate position.”

Shares in the retailer rose 2% to $4.44 in yesterday’s day of red ink in the broader market.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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