Consumers cautious according to Harvey Norman, as profit slumps 35% in FY24

Harvey Norman Holdings Ltd (ASX:HVN) said Australia’s discretionary retail sector was experiencing ‘ongoing challenges and transformations’ as it reported a fall of nearly 35% in its net profit after tax during the 2024 financial year, for a final figure of $352.5 million.

The company – which has stores in Australia, New Zealand, Singapore, Slovenia, Ireland, Northern Ireland, Malaysia and Croatia – also saw sales revenues drop to $8.86 billion from $9.19 billion in FY23 Harvey Norman, underlining buyer caution.

Inflationary pressures were also noted in its reading for operating expenses, which were up 1.5% to $25.01 million, with new store openings also mentioned as a factor.

However, chairman Harvey Norman appeared enthused about one sector which is likely to gain focus in the coming months: AI-enabled computer products, around which the company had developed a marketing strategy.

“We are excited about the recent Generative Artificial Intelligence (Gen-AI) product cycle and are committed to investing in digital initiatives and the necessary technological
upgrades to our infrastructure,” he said.

“These investments will assist both our franchisees and company-operated stores in promoting Gen-AI-enabled products to mainstream consumers.

“Our omni-channel strategy, bolstered by our strong brand and extensive geographical reach, will empower franchisees and company-operated stores to leverage the emerging AI PC market, which will drive sales growth as additional AI-PC products come onto the market.”

Harvey Norman kept its final dividend payout at 12 cents per share for FY24.

The company’s shares fell on the financial results, and by 11:31 AEST, were trading at $4.66: a drop of 4.81% since the market opened.