Harvey Norman (ASX: HVN) Hits Record High on 9% Sales Surge: Time to Take Profits or Ride the Momentum?

Harvey Norman Holdings (ASX: HVN) climbed 4% to a record high of $7.71 today after delivering a strong FY26 trading update at its annual general meeting. For the period from 1 July to 20 November 2025, aggregated sales jumped 9.1% year-on-year, while comparable store sales rose 8.1%. These numbers confirm that consumer spending across Harvey Norman’s key markets remains resilient and, in our view, validate the company’s international expansion strategy. However, with the stock already up nearly 60% over the past 12 months, much of this good news appears priced in.

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UK Turnaround Is the Real Story Here

The standout performer in today’s update was the UK operation, which delivered a staggering 123.6% sales increase in Australian dollar terms. Even accounting for currency tailwinds, this represents genuine market share gains in a competitive retail environment.
We believe this is the most significant development in the update. Harvey Norman’s UK expansion was initially loss-making, with the company absorbing substantial establishment costs. The turnaround suggests the “Home, Lifestyle and Tech” retail formula can successfully translate beyond Australia, opening the door for further international growth.

Other overseas markets also showed that the strategy is working:

– Slovenia and Croatia: Sales up 25.3%, demonstrating Harvey Norman can thrive in smaller European markets

– Ireland: Sales up 17.9%, continuing its position as one of the stronger international performers

– Malaysia and Singapore: Comparable sales up 11.4% and 8.5%, respectively, validating the Asian expansion thesis

The company now operates 121 company-operated stores across eight countries. This international diversification is increasingly important for the investment case, reducing reliance on the mature Australian market, where growth is naturally slower.

Australia Remains Solid But Less Exciting

Closer to home, Australian franchise sales increased 6.5%, with comparable store sales up 6.4%. New Zealand showed similar patterns, with total sales up 8.2% and comparable growth of 6.3%.
While respectable, this domestic growth trails international operations noticeably. In our view, this divergence tells an important story: Harvey Norman’s future growth engine is offshore, which brings both opportunity and execution risk as the company scales in unfamiliar markets.

Buyback and Valuation Considerations

Harvey Norman recently extended its share buyback programme until November 2026, allowing repurchases of up to 10% of issued shares worth approximately $900 million. We interpret this as management confidence in the company’s financial position and a signal of price support.
That said, the stock isn’t cheap after its rally. Trading near all-time highs with a 60% gain in 12 months, the valuation assumes continued strong execution. Any stumble in international expansion or softening in consumer spending could trigger a pullback.

The Investor’s Takeaway

Harvey Norman’s results are undeniably strong. The international expansion is working, the buyback provides downside support, and sales momentum across most markets is encouraging. For existing shareholders who bought during tougher times, this record high is a well-earned reward.
However, we believe new investors face a different proposition. After rallying 60% to all-time highs, the easy money has likely been made. The stock is now priced in continued strong execution, leaving limited margin for disappointment.

Our take: Current holders should stay the course while sales momentum persists, though trimming some profits after such a strong run is reasonable. For those looking to initiate positions, we’d suggest patience. Retail stocks are cyclical, and a pullback towards the $6.50-$7.00 range would offer a more attractive entry point. The underlying business is performing well, but at record highs, you’re paying a premium price for that performance.