ASX:HVN

Harvey Norman's Growing International Footprint Helps Boost Fiscal 2026 Sales, With More Expansion Lined Up

Harvey Norman Holdings (ASX:HVN) beat analyst estimates for fiscal 2026 earnings despite softer trading conditions in the second half of the year, as a widening global footprint helped push sales higher.The consumer electronics and home furnishings retailer on Friday posted earnings of AU$0.4236 per share for fiscal 2026, surpassing a consensus estimate of AU$0.37 compiled by FactSet and rising from AU$0.415 a year ago.It also reported aggregate system sales revenue of AU$9.64 billion for the 12 months through June, up from AU$9.35 billion in the year-ago period.Harvey Norman attributed the revenue jump to the strength of its Australian franchisees as well as its widening international footprint. It opened five new company-operated stores in fiscal 2026 while undertaking category expansion initiatives in the UK.In the first half of the fiscal year, franchisee sales revenue grew almost 5% year over year to AU$3.5 billion amid improved consumer confidence, a more stable inflation outlook, and "solid Christmas trading" that boosted growth across the key home, lifestyle, and technology categories, the company said.The retailer also issued a trading update for July, which Jefferies described as "weak" and "difficult to interpret" as declining Australian sales were impacted by product launch timings while base comparables were demanding. At the same time, August written sales orders grew nearly 4% from a year earlier.In a note to clients, the investment firm also noted weaker-than-expected cash realization as Harvey Norman's operating cash flow of about AU$537.2 million fell 23% year over year and came in well below Jefferies' estimate of AU$716.8 million. The company's management pointed to increased utilization of financial accommodation to support franchises in inventory purchases during the second half of the fiscal year.Harvey Norman said it will continue expanding its international presence in fiscal 2027, with plans for a third site in the UK's West Midlands region, three new stores in Malaysia, one in Singapore, as well as a new clearance center in Ireland. The company also expects to open a flagship store in Croatia in 2028.