Harvey Norman
Harvey Norman Holdings (HVN) is an Australia-based public-owned integrated retail and property company engaged in franchising and advertising services provision to its franchisees, homewares and electrical goods marketing and sales, consumer finance provision, leasing and property investment. HVN was listed on the Australian Stock Exchange on the 3rd of September 1987. Its average annual revenue reaches approximately $1 billion. Its headquarters is located in New South Wales, Australia and to date; around 13000 people are employed in the company.
Gerry Harvey has said that they are planning to close up to ten Harvey Norman stores in the next six months due to the economic slowdown. Harvey Norman (HVN) has 192 franchised stores in Australia and 28 stores in New Zealand, as well as outlets in Ireland, Singapore and Malaysia. The international retailer has revealed a decline in store sales up to 5% and margins have been cut by 10%. The retailer's pre-tax profit fell by 32% in the three months to September.
Jubilee Mines (JBL) was the overall best performing Australian company taking in a 37.7 percent increase of its stock price this week. Among the best performing stocks for the week 45 of 2007 on the Australian sharemarket were a mixture of mining and retail: Harvey Norman (HVN), Paladin Energy (PDN), Oxiana (OXR), Jubilee Mines (JBM), Independence Group (IGO), Sally Malay (SMY). These best performing stocks for week 45 of 2007 recorded gains above 7.9 percent by the end of the trading week.
Harvey Norman (HVN) have maintained a price target of $4.25 for their shares from stock analyst Citigroup Investment Research (CIR). The retailer has reported 1H07 sales of $2.71 billion, growth of 16.7%. Furniture sales continue to improve, but air-conditioner sales were weak dragging like-for-like growth down to 6.2% in 2Q07 from 8.2% in 1Q07. CIR have slightly raised their EPS forecasts by 0.9% in FY07e and FY08e to reflect the sales result. Furniture sales grew 10% in 2Q07. The result continues the improvement seen in 1Q07 and is a positive sign for HVN's FY07e profit margins given the pressure on Furniture sales in FY06. 2Q07 growth softened because sales of seasonal merchandise fell. The temperature in the eastern states of Australia was lower than 2005. However, overall temperatures were near long-term averages indicating the sales slowdown was a correction. Harvey Norman confirmed that it acquired 14 Retravision stores. The acquisition price was not revealed, but no goodwill was paid. The acquisition adds to HVN's market dominance in Australia and weakens a major competitor. CIR expect more stores to be acquired in the coming months.Total new store growth was the fastest since FY04. The growth continues in offshore markets with new stores in Ireland and NZ during 2Q07.
Deutsche Bank have rated the Harvey Norman (HVN) stock with a hold recommendation dropping their share price target to $3.75 from $4.00. Continuing downside risks to the retail business are rising world oil prices and higher interest rates.
Credit Suisse has rated the Harvey Norman (HVN) stock as Downgrade to Neutral from an Outperform recommendation. Harvey Norman Holdings is listed on the Australian Stock Exchange (ASX) under stock code HVN. Check your charts!
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