While most retailers in Australia have been reeling over the past 12 months as macroeconomic pressure has seen consumer spending plummet, tech retailer Harris Technology (ASX: HT8) is on the verge of a major turnaround that has seen a 56% improvement in its results.
For the Half Year ended 31 December 2024, Harris Technology reported sales revenue of $7.0 million. Although that represented a 20.9% decrease on the previous corresponding period, the Company’s gross profit of $2.6 million was up 10.7% on the same comparative period.
This drove a 56% improvement in their result after tax to ($0.3) million, powered by the expansion of their refurbished tech division which sources, refurbishes and sells perfectly functioning tech products as low-cost alternatives to new ones.
Despite some easing in cost-consciousness during the retail holiday season, demand for refurbished technology products has been sustained, driven by consumers and businesses seeking budget-friendly alternatives without sacrificing brand names or quality.
Refurbished tech products are pre-owned devices that undergo rigorous testing, repairs, and quality checks before being resold at a fraction of the price of new models. As authorised sellers of refurbished products on most major online marketplaces such as Amazon and eBay – refurbished products listed by Harris Technology, with their 30+ years of retailing in Australia, are snapped up quickly.
Beyond just the cost-savings, purchasing refurbished tech reduces electronic waste and extends the lifecycle of devices, aligning with growing environmental consciousness among consumers and businesses.
Harris Technology’s Roadmap to Profitability
Harris Technology’s renewed focus on higher-margin refurbished products has already yielded tangible returns for shareholders with improvement largely driven by the refurbished division, which contributed to a notable rise in gross product margin for the Half Year to 34.9%, up from 27.1% at the end of 2023.
CEO Garrison Huang highlighted the company’s adaptability in response to shifting consumer demand.
“Our strategic pivot towards higher-margin refurbished tech products is already delivering tangible benefits. We have significantly improved our gross margin and profitability, showcasing the resilience of our business model,” he said.
A crucial part of Harris Technology’s strategy is the ongoing reallocation of resources. The Company is scaling back household inventory to make room for further expansion of its refurbished tech segment. Warehouse space dedicated to refurbished products increased during H1 FY25 and is set to expand further in H2 FY25 as the retailer continues its focus towards its higher-margin products.
Emily Maxwell is a business writer at The Sentiment with interest in the tech, fintech and retail industries.
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1 Comment
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