Shares of Harvey Norman [ASX:HVN] lost 4.04% today. Shares went from trading at $4.08 yesterday down to $3.91 at time of writing.
Why did the Harvey Norman Share Price Rise?
Harvey Norman announced a ‘record breaking’ full-year profit report of $448.98 million, up by 29% from the previous year. Profit before tax was $639.81 million, an increase of 29.6% from the previous year
Yet investors aren´t buying it. Why?
Even with a record profit, the electronic giant slashed its final dividend to preserve cash. Dividend was cut by 5 cents, bringing it to 12 cents per share. This brings the full year dividend down to 26 cents, compared to 30 cents last year.
The New Zealand retail segment profit was up by 15.6% and the Singapore and Malaysia retail segment profit was also up by 69.9%.
Harvey Norman operates under a franchise system in Australia with 168 franchisees. They also have company operated stores in New Zealand, Ireland, Northern Ireland, Singapore, Malaysia, Slovenia and Croatia.
What now for Harvey Norman?
Harvey Norman´s furniture department has done well during Australia´s housing boom. The , company is expecting growth to continue as Australia´s population increases by 1 to 2 million over the next 3 years.
Yet with the housing boom slowing and with Amazon looking to set up shop in Australia, Harvey Norman could be readying for turbulence.