The Harvey Norman Holdings Limited (ASX: HVN) share price is trading flat on Wednesday after releasing a sales update.
At the time of writing the retail giant’s shares are changing hands for $3.55.
What did Harvey Norman announce?
Today’s update reveals that Harvey Norman’s Australian business has been on form during the pandemic.
During the crisis, only two franchised stores in Tasmania were closed for two weeks due to a mandated closure of the region by the Tasmanian State Government.
All other Australian franchised stores remained open. This was because, like supermarkets, Harvey Norman was seen as an essential service by the Australian Government during the crisis.
In light of this and increasing demand for many of its products, as of 31 May 2020, the Harvey Norman franchise network has delivered a 17.5% increase in sales in the second half.
This compares to just a 0.1% increase in sales during the first half and means that its year to date sales are up 7.4% on the prior corresponding period.
What about the rest of the business?
Things weren’t quite as positive for its overseas operations, where the vast majority of its stores were forced to close for certain periods during the pandemic.
In Australian dollar terms, New Zealand company operated sales are down 7.3% during the second half. It was a similar story in Slovenia and Croatia, with sales down 5.5% half to date.
Things were much worse in Northern Ireland and Singapore. Second half sales were down 38.2% and 21.7%, respectively, as of 31 May.
Positively, its Ireland and Malaysia stores were still growing their sales. Ireland sales are up 25.4% during the second half and Malaysia sales are up 1.3%.
In April, Harvey Norman revoked its decision to pay shareholders a 12 cents per share interim dividend due to the pandemic.
It appears as though things haven’t turned out as bad as it first feared. As a result, it has decided to pay a special dividend to shareholders later this month.
Harvey Norman will pay a 6 cents per share fully franked dividend on 29 June 2020. To be eligible, you will need to be a registered shareholder at the close of business on 23 June 2020.
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Returns as of 6th October 2020
Motley Fool contributor James Mickleboro 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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