Highlights

  • FY26 statutory profit before tax rose 4.9% to A$790.29 million, while adjusted profit before tax increased 10.9% to A$654.69 million.
  • Total system sales reached A$9.64 billion, supported by Australian Franchisee sales and company-operated international retail.
  • Overseas company-operated retail profit before tax increased 23.4%, led by growth across several established markets.
  • Property remained a major balance-sheet component, while net Debt increased.
  • Early FY27 trading showed softer July sales followed by improved August written sales.

Harvey Norman Holdings Ltd (ASX:HVN) combines Australian franchising, company-operated international retail and a substantial property portfolio. In Australia, independent franchisees pay fees, rent and other charges, while overseas the group operates retail businesses directly. FY26 therefore reflected three Earnings streams: franchising, international retail and property valuation movements.

FY26 Earnings and Sales

For the year ended 30 June 2026, total system sales rose 3.1% to A$9.64 billion. Australian franchisee sales increased 2.4% to A$6.584 billion, while company-operated sales rose 4.5% to A$3.052 billion. Consolidated Revenue was A$4.68 billion and EBITDA increased 5.0% to A$1.18 billion. Net profit after tax and non-controlling interests reached A$528.46 million, up 2.0%.

Statutory profit before tax rose 4.9% to A$790.29 million and included a A$156.75 million net property Revaluation increment. Adjusted profit before tax, excluding property revaluations, AASB 16 Lease effects and a pecuniary penalty, increased 10.9% to A$654.69 million. The gap shows why operating and valuation effects should be considered separately.

Franchising, International Retail and Property

The franchising division produced A$345.18 million of profit before tax on revenue of A$1.09 billion, with profit rising 4.3%. Overseas company-operated retail generated about A$135 million of profit before tax, up 23.4%. Established international operations excluding the United Kingdom earned A$166.93 million, up 25.2%, with growth across Slovenia and Croatia, Ireland, New Zealand, Singapore and Malaysia.

Property Assets stood at A$4.80 billion, about 54% of total assets of A$8.85 billion. Net assets were A$4.94 billion. Net debt rose to A$940.87 million from A$658.52 million, while net debt to Equity increased to 18.81%. The higher debt level makes cash generation, property values and interest costs important watch points.

Dividend and Early FY27 Trading

The full-year Dividend was 27.5 cents per share, fully franked, up 3.8%, comprising a 14.5 cent Interim Dividend and a 13.0 cent final dividend.

Australian franchisee sales rose 4.8% in the first half but fell 0.2% in the second half. Comparable sales in July 2026 declined 3.4%, while comparable written sales for 1 to 24 August increased 3.8%. Written sales measure orders taken rather than completed deliveries. The group also plans one new franchised complex, four relocations and four refits in Australia during FY27.

Key Risks and Watch Points

Harvey Norman remains exposed to household spending, housing activity, consumer confidence and interest rates. Weaker discretionary spending can affect franchise sales, while changes in property values can move statutory profit and net assets. Rising net debt and execution across international operations are additional risks.

Key Insights

Harvey Norman Holdings Ltd (ASX:HVN) entered FY27 after higher FY26 profit, improved international retail earnings and a larger fully franked dividend. However, property revaluation gains contributed materially to statutory profit, Australian franchisee sales softened in the second half and net debt increased. Upcoming updates will show whether improved August written sales convert into delivered sales and whether international growth continues to offset softer domestic retail conditions.