Harvey Norman posts robust profit as sales growth falters

The retailer has maintained its strong profit growth in the first quarter but sales growth has eased.

Harvey Norman chief executive Gerry Harvey in his Homebush West office. (Hollie Adams/The Australian)

Harvey Norman has largely retained the momentum from a record full-year result through the first quarter of fiscal 2017, although sales growth slowed from last year’s showing.

For the three months to September 30, the retailer (HVN) logged a 6.6 per cent rise in sales to $1.69 billion, as its international operations were aided by strength in the New Zealand dollar but weighed down by a weak euro and faltering pound.

Harvey Norman also detailed unaudited pre-tax profit of $115.6 million for the first quarter, up 25.9 per cent on the prior corresponding quarter and broadly in line with the earnings growth displayed through FY2016.

Its comparable sales lifted 6.5 per cent, with its Australian franchisees reporting growth of 5.4 per cent.

In fiscal 2016, its comparable sales for Australian franchisees surged 8.4 per cent, with the first quarter growth reading weaker than displayed at any quarter in the most recent financial year.

At 10.45am (AEDT), Harvey Norman shares climbed 1.6 per cent to $5.05, quickly reversing a decline on open as traders focused on the strong earnings growth.