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Harvey Norman's NZ 1H sales, earnings fall on weak retail climate

Wednesday 29th February 2012

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Harvey Norman, Australia's largest electrical goods retailer, said sales and operating earnings fell in New Zealand in the first half, reflecting a combination of natural disasters and the “challenging retail climate.”

New Zealand sales fell 3.7 percent in the six months ended Dec. 31, in Australian dollars, while operating profit fell to A$20.6 million from $20.7 million a year earlier. In New Zealand dollar terms, sales fell 3.5 percent and operating profit fell 0.4 percent.

“New Zealand's challenging retail environment was further exacerbated by store closures in Christchurch arising from the earthquakes,” the company said in a statement. “The New Zealand operations are robust, being the market leader across all major product categories.”

Harvey Norman said it expects positive results from New Zealand, despite the upheavals caused by the earthquakes and despite “intense competition.”

Harvey Norman's total first-half net profit fell 2.1 percent to A$129 million which chairman Gerry Harvey blamed on intense competition, price deflation in key categories, the strong Australian dollar and “a prudent consumer.”

Shares of Harvey Norman fell 6 percent to A$2.03 on the ASX and have climbed 17 percent so far this year.

Harvey said he is pleased with the company's performance in New Zealand.


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