Harris Technology has reported declines to its revenue and profit as restrictions related to the COVID-19 pandemic continue to ease.
In a trading update, the ASX-listed IT hardware and consumer electronics retailer saw its revenue decline over the past three quarters, and it also anticipates a net loss for FY2022.
While Harris expects full year revenue of around $50 million for the full year, which is a 20 percent year over year increase from $41.8 million in FY 2021, revenue for Q3 2022 was $12.6 million, down from $13.4 million in Q2 and $15.1 million in Q1.
The company has also forecast a net loss after tax of between $500,000 to $650,000, compared to a net profit of $1.8 million in FY 2021.
“The company’s sales of technology products have stagnated since the easing of pandemic restrictions and higher cost-of-living expenses have also impacted consumer discretionary spending on technology products,” the update read.
“In prior years, the month of June traditionally saw increased sales but in June 2022 to date, there has been no marked pickup from End of Financial Year promotions.”
The decline in profit was credited to increased freight expenses and lower demand on tech products, which contributed to a decline in gross margins. Harris also had to reduce margins on some products, including high-end graphic cards and gaming monitors over the last six months.
“Although Harris Technology’s [net profit after tax] has been impacted by industry headwinds currently being faced by the eCommerce sector, the board is satisfied with the quality and level of the inventory,” the update read.
“Whilst the company is pleased to see revenues in FY22 grow on the previous year, the board acknowledges that the high demand on technology products witnessed during the pandemic will not be sustained in the current economic environment.”
Harris will look to diversify its product offerings to address this concern, specifically with higher margin product categories and selling on more marketplaces like Amazon, eBay, Catch and Kogan. One category set to launch is household products, with a new dedicated e-commerce site undergoing beta testing.
“The board is comfortable with the company’s balance sheet at FY end and there is no intention to raise capital in the coming months,” Harris said.