The Harvey Norman Holdings Limited (ASX: HVN) share price is falling on Wednesday. At the time of writing, shares in the company are down 2.41% to $5.065 apiece.
This follows the release of the retailer's trading update for the period between 1 July 2021 and 21 November 2021.
Let's take a look at how the company has fared.
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Hard to beat record sales
In its update today, Harvey Norman has informed investors of a weaker start to the new financial year than its previous.
According to the release, aggregate sales revenue for the first 4 months and 20 days came in 8.8% lower than last year. For reference, the same period in 2020 was one of record performance for Harvey Norman.
At that time, sales revenue posted a year-on-year growth of 28.2%. Meanwhile, aggregated sales revenue is up 16.9% when compared to the pre-COVID-19 months in 2019.
A depreciation in multiple currencies where Harvey operates contributed to the weaker sales revenue growth. Namely, a 2.9% depreciation in the Euro, a 1.7% depreciation in the Singaporean dollar, and a 2.9% depreciation in the Malaysian Ringgit.
Although, this was partially offset by a 2.7% and 3.0% appreciation in the New Zealand dollar and UK pound respectively.
Similarly, the company's profit before tax took a tumble compared to the prior corresponding period. Unaudited preliminary accounts for the period indicated a profit before tax of $217.42 million. This represents a 35.5% fall compared to last year's $337.11 million. This significant drop in profits could be influencing the Harvey Norman share price fall today.
However, the retail giant is in a much better position than pre-COVID. Profit before tax is up 70.1% compared to the 2019 period.
Malaysia and Australian franchisees were the most impacted countries for sales revenue during the period. On a comparable basis, these regions were down 24.6% and 11.1% year on year.
Harvey Norman share price under the microscope
While the Harvey Norman share price remains above its pre-COVID levels, it has performed roughly in line with the benchmark index.
Since the start of 2021, the retail giant has gained 8.5%. Though, this fails to exceed the S&P/ASX 200 Index (ASX: XJO) which has climbed 10.9%.
The Harvey Norman share price currently trades on a price-to-earnings (P/E) ratio of 7.7 times.
