Harvey Norman loses its gloss
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SYDNEY, Australia (Reuters) -- Australia's biggest furniture and electronics retailer, Harvey Norman Holdings Ltd, disappointed investors on Thursday.
Its first-half sales data showed robust momentum leading into the key Christmas period fizzled.
The market focused on the softer-than-expected sales growth from stores more than a year old, and disgruntled investors swiftly sold the stock as much as 4.5 percent lower.
Its stock climbed 60 percent to A$3.47 in the seven months to October as its sales went from strength to strength, but has since faded. It ended 2.4 percent lower on Thursday at A$2.84.
Harvey Norman -- a poster child of the Australian retail sector in the past two years -- said unseasonably cool weather in November and December hurt demand for air conditioners.
Like-for-like sales for the six months to December 31 rose 11 percent, less than the 15 percent growth reported for the four months to October.
"The market's focus here is on the implied result for the last two months because we'd already seen that the results were remarkably strong for the first four trading months," said John Bergin, director of Australian research at fund manager Alliance Capital Management.
"The market is disappointed with the implied loss of sales momentum in November and December," he said.
Harvey Norman said first-half sales including new stores rose 16.6 percent to A$1.87 billion ($1.44 billion).
This signaled second-quarter sales growth of just 13.6 percent to A$1 billion. The percentage suggested a deeper-than-expected slowdown from 22 percent growth in the first quarter.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
