Harvey Norman shares dip after first-half earnings announcement

Shares in Harvey Norman dipped by as much as 7.6 per cent in early trading in Sydney today (January 29) after the Australian retailer announced its first-half earnings for 2011-12.

Stalling consumer spending, as well as falls in three major foreign currencies - the UK pound, the euro and the NZ dollar - were blamed as the culprits for the 2.1 per cent fall in total earnings at the nation's largest electrical goods retailer, with net income dropping to $128.9 million in the last six months of 2011.

This compares to a net income of $131.7 million in the previous year.

Harvey Norman co-founder and chairman Gerry Harvey said that many retailers - especially those operating in the technology area - are suffering in the current economic climate, pointing to the recent fates of Colorado, Retravision and Dick Smith.

"You are now seeing more retailers go broke and out of business than I have ever seen in my life," he told the ABC.

Same-store sales in Australia fell by 6.5 per cent over the six-month period, he added, while European branches of Harvey Norman saw sales slip by 15 per cent.

Other Australian consumer technology retailers, including JB Hi-Fi, have also pointed to challenging consumer conditions in the second half of 2011.

Speaking after today's announcement, OptionsExpress market analyst Ben Le Brun highlighted the increasing number of consumers shopping for electric goods online - or even curbing their spending altogether.

He said: "These sales figures are further evidence of the continued theme of the cautious or spend thrift consumer in Australia and throughout the world."

Gerry Harvey and Ian Norman opened the first Harvey Norman store in Sydney in 1982. Today, Harvey Norman Holdings Ltd operates retail franchises across Australia and New Zealand, as well as Malaysia, Singapore, Ireland and Slovenia.