Mention profit slump to Harvey Norman chairman, Gerry Harvey and the answer is a positive one.

“When you look at the overall strength of the company it’s pretty good, a good dividend, good growth, a good reinvestment into the company and assets are up 40% to what they were four years ago,” he told Appliance Retailer. “We flagged to the market earlier this year what the results were likely to be, and these were pretty much what was expected.”

The group posted a profit before tax of $776 million for FY23, down nearly 32%, while total revenue was down 3.8% to $9.1 billion. However, the balance sheet remains strong with total assets of $7.67 billion anchored by a $4 billion property portfolio.

In Australia, the franchising operations segment recorded profit before tax of $373.36 million for FY23, a decline of 32.5% year-on-year, generating a margin of 5.82% compared to 8.19% in FY22. Revenue in the franchising segment was down 10.7% to $1.07 billion.

In a trading update for the month of July, total aggregated sales for Australian franchisees was down 12.3% with comparable sales declining 12.6%.

“Looking at the big picture, could it be better? Yes, and are we looking forward to the future with confidence? Yes, but will this year be a great year…no.”

Two categories he predicts will improve are outdoor furniture and air conditioning with slow sales in the past couple of years largely affected by weather.

“Demand for products under $1,000 are slower than those above $4,000 such as premium cooking and refrigeration appliances.”

Foot traffic is down substantially in all stores, but the advertising blitz will continue, he said.

According to Harvey, the challenges going forward are cost of doing business and trading conditions. “The cost of living is being crowded out by the voice debate but when that finishes a lot of headlines will be back on electricity prices, rents and building a house, which is not great for consumer confidence.”