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Harvey Norman share price edges lower on sales update

James Mickleboro
Harvey Norman

In morning trade the Harvey Norman Holdings Limited (ASX: HVN) share price has edged lower.

At the time of writing the retailer’s shares are down slightly to $4.31.

Why is the Harvey Norman share price heading lower?

Ahead of its annual general meeting in Sydney, Harvey Norman released a sales update.

According to the release, the aggregated sales from wholly-owned company-operated stores and from independent Harvey Norman, Domayne, and Joyce Mayne branded franchised complexes totalled $2.44 billion for the period July 1 to October 31.

This was an increase of 2% on the aggregated sales generated in the prior corresponding period. Comparable aggregated sales for the period increased by 1.7%.

Some of this gain is attributable to favourable currency movements. The British pound, Euro, Singaporean dollar, Malaysian Ringgit, and New Zealand dollar all strengthened against the Australian dollar.

A summary of how its businesses performed during the period can be seen on the table below:

harvey norman sales

What else happened at the annual general meeting?

Harvey Norman provided shareholders with a reminder of how it performed in FY 2019.

It delivered an 8.8% increase in reported profit before tax to $574.56 million, a 4.5% increase in earnings per share to 34.7 cents, and declared a 33 cents per share dividend.

It also noted that 23% of its profit before tax is now generated overseas. This looks set to continue growing in the coming years, with management seeing a major opportunity in the Malaysia market.

Harvey Norman

As you can see above, Malaysia appears to be a market which has the potential to cater to a much larger number of Harvey Norman stores compared to where it stands now.

This could be a key driver of growth in the future, helping to offset a potential slowdown in growth in the increasingly saturated Australian market.

Elsewhere on the market today, the JB Hi-Fi Limited (ASX: JBH) share price is trading slightly lower, potentially in response to this update.

The post Harvey Norman share price edges lower on sales update appeared first on Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019