The Harvey Norman Holdings Limited (ASX: HVN) share price is pushing higher on Wednesday after the release of a trading update.
At the time of writing, the retail giant's shares are up 2% to $4.78.
How is Harvey Norman performing in FY 2021?
Harvey Norman has started FY 2021 in a very positive fashion and has recorded strong sales and profit growth.
According to the release, aggregated sales revenue increased by 28.2% between 1 July and 21 November compared to the prior corresponding period.
This has been driven by strong same store sales growth across almost all regions and particularly in the ANZ market.
Harvey Norman's Australian franchisees delivered a 30.4% increase in comparable store sales and its New Zealand stores reported a 20.4% lift in comparable store sales. This includes stores that were temporarily closed due to COVID-19.
A total of 18 stores were closed in greater Melbourne from 6 August to 27 October due to stage 4 restrictions. These stores quickly moved to a click & collect and contactless delivery model to limit the sales impact.
A further 10 stores were closed in South Australia for a 3-day period from 19 November in order to prevent a COVID-19 second wave in the region. These stores have now reopened as normal.
Strong profit growth.
Pleasingly, for shareholders, Harvey Norman's profit growth has been even stronger in FY 2021 thanks to margin expansion.
The release explains that its unaudited profit before tax for 1 July to 31 October was up a massive 160.1% on the prior corresponding period.
Management advised that, excluding the net impact of AASB 16 Leases and net property revaluation adjustments, it achieved a profit before tax of $341.11 million for the fourth months. This compares to $131.17 million in the prior corresponding period.
Though, management has warned that there is no guarantee that this strong form will continue throughout the remainder of the half or full year. It notes that "the COVID-19 pandemic has caused, and continues to cause, great uncertainty about the future economy."
