Harvey Norman growth slows

Harvey Norman growth slows

Retailer posts 8.7 per cent increase in sales for the financial year, down from 16.5 per cent in the previous year

ASX-listed Harvey Norman (ASX: HVN) yesterday posted an 8.7 per cent increase in sales for the financial year ending June 30, 2008.

The results include all Harvey Norman franchised stores across Australia, New Zealand, Slovenia and Ireland. They represent a slowdown compared to growth of 16.5 per cent in the previous year.

In a statement to the ASX, the retailer indicated sales reached $5.81 billion for the 12 months to 30 June, up from $5.34 billion.

Fourth quarter sales were also up 5.2 per cent on the same period last year, hitting $1.43 billion while like-for-like sales for the quarter increased 3 per cent on the year.

"Our results are pretty much line ball with the corporate growth," Harvey Norman computers and communications general manager, Luke Naish, said. "We've had single-digit growth. It hasn't been as spectacular as years past but I think the market for whatever reason has been perhaps expecting a poorer showing.

"We are, I guess, under the circumstances happy but you always want more. I think we are contented under current market conditions."

In the lead up to the end of the financial year, Naish claimed notebooks under $1000 were driving a lot of growth and as a result Harvey Norman implemented a deliberate strategy to focus on this sector and adjust with prevailing market conditions.

"We certainly got into the entry-level market boots and all," he said. "Initially we were concerned with the lower margins on offer in that space. It has become a numbers game and winning the notebook market at first price becomes so essential because it is also the catalyst for additional value.

"I think it probably allowed us to maintain the results we did have. Had we not entered into that market as aggressively as we did, we may not have seen the results we did achieve."

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