Harvey Norman releases 'unaudited' accounts

No relief for struggling retailer.

Harvey Norman has suffered another difficult quarter, following poor results in Q2 with a 9 percent drop in Australian sales for the three months ended March 2012.

The figures were contained in unaudited accounts released today which showed a 6.7 percent fall in global sales.

Harvey Norman blamed local price erosion in IT products for a 24.8 percent drop in gross profit for the period. The retailer reported an unaudited pre-tax profit of $205 million for the nine month period, compared to $272 million in the previous corresponding period.

Third quarter sales dipped 9.2 percent compared to Q3 2011, following a 10.2 percent decline in Q2.

Harvey Norman shares were down 3.6 percent to $1.99 by early afternoon trade.

The retailer attributed the sales decline to a high Australian dollar and intense competitor activity. It highlighted the collapse of WOW Sight and Sound and the closure of Dick Smith as potential opportunities to increase market share.

Costs associated with Harvey Norman's $55 million buyout of retailers Clive Peeters and Rick Hart were highlighted once again. The company was forced to appoint administrators to three of the failing subsidiaries late last year, stating, “the Clive Peeters and Rick Hart brand formats have not achieved the requirement for ongoing investment by the company".

Seven more of the purchased stores will be shut down over the coming year with the remaining 16 to be rebranded as Harvey Norman outlets. 

The company in February also announced its intention to close an under-performing Canberra store, but called the closure a “normal part of business evaluation” and hinted it may open new shopfronts in the coming months.

The retailer last year revealed the full year cost of its Clive Peeters and Rick Hart acquisition had set it back $41.07 million. 

Harvey Norman's full-year audited results are expected to be released in a few months.