The strong Australian dollar, price deflation and the eroding consumer confidence has been to blame for Harvey Norman’s 19.3 per cent fall in its first quarter profit before tax.
The company reported that total sales fell to $1.48 billion for the three months ended 30 September, while pre-tax earnings dropped from $77.7 million to $62.8 million.
When compared to global sales for the period, the company, which also has stores in New Zealand, Slovenia, Ireland and Northern Ireland, the decreased was 3.8 per cent.
“Global sales have been negatively affected by the deterioration of the New Zealand dollar by 0.3 per cent, Euro by 5.7 per cent and UK Pound by 10.6 per cent against the Australian dollar, from 1 July 2011 to 30 September 2011,” the company said in a statement.
According to the company, the closure of four Clive Peeters and three Rick Hart stores also had a negative impact on its performance.
Despite this, the company has opened new stores in Croatia, Slovenia, Singapore, as well as its homemaker complex in Victoria anchored by Ikea, Harvey Norman and Domayne.