Gerry Harvey has hit back at investors after his company Harvey Norman suffered an eye-watering $386 million wipe-out.
On Tuesday, the firm revealed that its sales in January had dropped by 10.2 per cent and that its profits for the first half of the year were lower than expected.
Investors also enjoyed a smaller dividend than they had hoped for.
The news had a cascading effect on the company’s share price, diving by 7.5 per cent within hours of its results being released.
Speaking to the Australian Financial Review, Harvey Norman founder and executive chairman Gerry Harvey admitted that February had not been a good time for the company.
“February is really our worst month,” he told the publication.
“We’re now coming into March, so March to June we’re trying to figure out what’s going to happen,” he said. “We are feeling confident it will be OK – not great – because we’ve still got full employment.
“You can’t get people to work for you in most industries.”
Later on, following the stock market plunge where Harvey Norman’s stocks fell by 31c, Mr Harvey hit back at investors, saying it was a “total over-reaction”.
“In the big picture everything is quite good,” he told The Australian.
Mr Harvey said the rhetoric around the cost of living crisis and inflation wasn’t matching up with what he was seeing.
“The story every day that interest rates are going up, people are suffering and things are going to get worse – well of course people are going to hold back if they read that every day but the reality is those people are very much in the minority and the great bulk of people out there, 9 out of 10, are doing quite well,” he told the masthead.
“The standard of living we have in Australia is one of the highest in the world.”
At time of writing, the market had not yet opened for Wednesday. Prices closed on Tuesday at $3.85 per stock.
News.com.au has contacted Harvey Norman for comment.
The interim results released on Tuesday painted a tough picture of Harvey Norman.
Its net profit fell by 15.1 per cent to $365.9 million.
However, it’s worth noting that its first-half sales still rose by 2.1 per cent to $3.51 billion.
The weather copped some of the blame, with investors informed that unusually cool weather conditions meant that airconditioning and fans were less popular, as were outdoor furniture and barbecues as less people spent time outside.
Harvey Norman also has a strong relationship with telco company Optus by selling phones and plans.
This arm of the business took a massive hit after hackers stole data from Optus, exposing millions of Australians to data breaches. As a result, purchases were significantly lower than usual.
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