Harvey Norman Holdings Ltd., Australia’s largest furniture and electrical retailer, had a 37 percent drop in profit after the effects of a government stimulus package waned, curbing demand for household goods.
Net income fell to A$72.6 million ($64 million) in the six months ended June 30, from A$115 million a year earlier. Second- half figures were calculated by subtracting first-half earnings from the A$231.4 million full-year profit the Sydney-based company reported today.
Demand for household items such as home entertainment systems fell in the second half after consumers exhausted the A$10 billion of cash handouts that boosted sales last year. Executive Chairman Gerry Harvey said the outlook for fiscal 2011 was more “promising” as the economy avoided recession.
“This year was really a tale of two halves, with the stimulus package still providing momentum in the first half, but then we saw a considerable drop-off in retail spending,” Harvey said in a statement. “We believe looking forward that it will be a pretty good 12 months.”
Harvey Norman shares fell 0.3 percent to A$3.53 at the 4:10 p.m. close of trading in Sydney. The stock has lost 16 percent this year compared with a 10 percent decline in the benchmark S&P/ASX 200 index.