Why the Harvey Norman Holdings Limited share price is getting hammered

If the share price of Harvey Norman Holdings Limited (ASX: HVN) is anything to go by, investors must have been expecting more out of the integrated retailer’s half-year results.

Shares in Harvey Norman have dropped 2.74% to $3.90 at the time of writing, down from $4.58 on February 27 before the release of a first-half profit slump of 19.3%.

Harvey Norman share prices slid to a three-month low on the day of the results announcement, dropping to $4.01 by February 28.

Harvey Norman’s net profit was reported at $207.7 million, down 19.3% from the previous corresponding period while sales in the franchise network were up 4.8% to $3 billion, but franchise network profit took a 2.9% hit to $167.2 million on competition and wages grounds.

Harvey Norman has its work cut out for it as global e-commerce giant Amazon makes its presence known in the Australian retail scene.

Shareholders will take a 2c interim dividend downgrade from 14c per share to 12c per share and price pressure remains an issue with competitors like JB Hi-Fi Limited (ASX: JBH).

JB Hi-Fi shares are also sitting down today at $25.47.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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