Harvey Norman Holdings reported underlying profit before tax of $654.69 million for the year ended 30 June 2026, a gain of $64.33 million or 10.9% compared with the prior year. This adjusted figure, which excludes AASB 16 lease accounting effects, property revaluations and a pecuniary penalty, provides the clearest view of underlying operational performance and signals genuine earnings momentum despite a tougher trading environment in the second half.
The growth came from system sales revenue of $9.64 billion, up 3.1% year-on-year, with the company crediting momentum in technology-led categories including artificial intelligence products and international store expansion. Earnings before interest, tax, depreciation and amortisation reached $1,181.95 million, up 5.0%. Basic earnings per share increased 2.0% to 42.41 cents, while the dividend per share rose 8.6% to 27.5 cents fully franked, reflecting management confidence in the business despite variable retail conditions across the second half of the financial year.
The franchising operations segment, which represents the bulk of the domestic business, delivered profit before tax of $345.18 million broadly in line with the prior year. Though earnings remained flat, the segment maintained a strong margin of 5.24% and generated higher revenue of $1.09 billion as increased franchise fees and rent offset softer trading conditions. The international retail segment outperformed, delivering profit before tax of $135.72 million, up 23.4% from the prior year. Excluding the strategic UK expansion, established international operations generated $166.93 million, up 25.2%, representing 25.1% of total profit before tax and demonstrating the earnings quality from these operations.
The balance sheet remains a significant strength. Total assets approach $9 billion with net assets near $5 billion, supported by substantial property ownership and low gearing. For investors, this asset-backed foundation provides a buffer in any economic downturn and positions the company to fund growth initiatives, respond to acquisition opportunities or return further capital if required. The 10.9% earnings growth achieved while maintaining dividends and building reserves suggests management is comfortable with the outlook relative to what is now a $9 billion asset base.
Looking ahead, investors should monitor how the company navigates what management described as more variable retail conditions in the second half. The strength in international earnings, particularly in Asia and New Zealand, will merit close attention, as will the capacity of the domestic franchising model to expand margins should consumer conditions stabilize. This announcement has been designated as price sensitive by the ASX.
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About Harvey Norman Holdings Limited (ASX: HVN)
Harvey Norman is a major retail company operating department stores across Oceania, Europe, and Southeast Asia under the Harvey Norman, Domayne, and Joyce Mayne brands. The company sells electrical goods, furniture, computing and communications products, bedding, kitchen appliances, bathroom fixtures, and flooring. It also operates an integrated property leasing business and provides consumer finance services.
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