Harvey Norman pre-tax profit falls 19.3%

Harvey Norman (ASX:HVN) blamed forex losses, competition, price deflation and planned store closures for a decline in revenue and pre-tax profit during Q1

Shares in Harvey Norman Holdings (ASX:HVN) fell 3.69 per cent on Tuesday, after the company reported a near 20 per cent slump in pre-tax profit for the September quarter.

The retailer estimates its pre-tax profit fell 19.3 per cent to $62.8 million, in a result blamed partly on “intense” competition and price deflation.

Harvey Norman also disclosed a 3.8 per cent slump in sales from its core operating markets to $1.48 billion, in a result blamed on the strength of the Australian dollar.

The foreshadowed closure of four Clive Peeters branded stores and three Rick Hart stores also impacted sales.

In August, Harvey Norman revealed plans to dump the Clive Peeters and Rick Hart brands, converting 18 of the 25 electrical and white goods stores into Harvey Norman stores and shutting down the rest.

Australian sales fell 2.9 per cent year-on-year, but the steepest declines were felt in Northern Ireland and New Zealand, where sales in constant local currencies fell by double figures.

The company opened four new complexes during the quarter, including stores in Singapore and Croatia.

HVN shares fell to a low of $2.000 in Tuesday's trading, before closing at $2.090.

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