The Harvey Norman Holdings Ltd (ASX: HVN) share price is taking a tumble today.
Shares in the S&P/ASX 200 Index (ASX: XJO) electronics and home furnishings retail stock closed yesterday trading for $4.89. In late morning trade on Friday, shares are swapping hands for $4.66 apiece, down 4.8%.
For some context, the ASX 200 is up 0.4% at this same time.
This underperformance comes following the release of Harvey Norman's full-year financial results (FY 2024).
Here are the highlights.
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Harvey Norman share price slides on falling profits
- Revenue of $4.11 billion, down 3.9% from FY 2023
- Reported profit before tax of $541.7 million, down 30.2% year on year
- Net assets of $4.54 billion, up 1.6% from FY 2023
- FY 2024 fully franked dividends of 22 cents per share, down 12% from the prior year
What else happened with the ASX 200 retail stock during the year?
Also likely throwing up some headwinds for the Harvey Norman share price today was the 1.5% year on year increase in operating expenses, which came in at $1.65 billion.
On the positive front, operating cash flows edged up $6.3 million from FY 2023 to $686.5 million, with a cash conversion of 100.4%.
Management also noted a big turnaround in profits for the second half of the year. While profit before tax in H1 FY 2024 was down a precipitous 45.7% from H1 FY 2023, second half profit was up 1.9% from the prior corresponding half year.
On the balance sheet, Harvey Norman reported a net debt to equity ratio of 14.49%.
The board declared a final fully franked dividend of 12 cents per share, in line with FY 2023. But with Harvey Norman paying a lower interim dividend in FY 2024, the full year passive income payout declined by 12%.
At the current share price, this sees Harvey Norman stock trading on a fully franked dividend yield of 4.7% (part trailing, part pending).
Eligible investors can expect to receive that final dividend payout on 13 November.
What did management say?
Commenting on the results that have yet to lift the Harvey Norman share price today, chairman Gerry Harvey noted that there were "ongoing challenges in discretionary retail" in FY 2024.
Harvey added:
Our strategic highlights during the year include building on our digital, online and in-store offerings, as well as the strategic expansion of our global store network and targeted investments in key segments.
We are excited about the recent Gen-AI product cycle and are committed to further investing in digital initiatives to assist both our franchisees and company-operated stores in promoting GEN-AI enabled products to mainstream consumers.
What's next?
Looking at what could impact the Harvey Norman share price in the year ahead, Harvey said, "We are strategically positioned to capitalise on improvements in retail trading conditions and the expected growth from the home renovation cycle, new home constructions and increases in net migration."
The company noted that it has a "significant opportunity" to benefit from the growth in the emerging AI-PC market. Along with the continuing innovation of products, Harvey Norman expects this to drive sales growth in its Home Appliances, Mobile & Computer Technology categories in FY 2025 and beyond.
Harvey Norman share price snapshot
With today's intraday loss factored in, the Harvey Norman share price remains up just over 21% in 12 months, not including those dividends.
