Retail giant Harvey Norman's 35 per cent fall in profit was a lacklustre result but Gerry Harvey sees a bright future driven by AI and Malaysia.
The company's profit was down to $352.5 million while its operating cash flow for 2023/24 grew to $686.5 million - $6.3 million more than year - and revenue fell 3.9 per cent to $4.1 billion.
Mr Harvey told AAP on Friday the result was "nothing fantastic".
"We'd hope to do a lot better this year. Overall, in a difficult climate, it's a reasonable result, but I'm not excited about it," he said.
Sales at Harvey Norman's 196 franchised complexes in Australia were down 5.6 per cent to $6.06 billion, although the drop was heavily weighted to the first half of the year, with sales only down marginally in the second half.
Still, franchisees' same-store sales were down six per cent in 2023/24, while JB Hi-Fi's Australian stores experienced 0.6 per cent same-store sales growth over the same period.
Mr Norman said the two retailers were different and JB Hi-Fi did not compete in areas such as bedding and furniture.
"We're performing very, very strongly in that area, but you can't get big growth there," he said.
"Sometimes, you've got to say, 'well, you're having a nice time now in the sun, but I'll have a little bit better time than you in another two or three years, because my long-term plan and future is pretty much assured', so that's the game we play."
Specifically, Mr Harvey said the company saw artificial intelligence as a big sales-driver.
"It'll bring more people into our stores. There's genuine interest in it from everyone," he said.
"And our staff are trained up to talk to people about what is AI, how will you benefit owning this product."
There will be AI features not just in computers and smartphones but also in refrigerators, washing machines and televisions, Mr Harvey believes.
"We're in a very privileged position, because we're in the electronics industry in the middle to upmarket and, consequently, if that goes off in the way that a lot of people are predicting, that puts us in a very strong position."
Harvey Norman sees its stores in Malaysia, one of the seven overseas countries where it operates, as a big growth area.
It has 34 stores there and plans to open another 50 within the next five or six years.
"It's a country that's growing very strong every year, wages increasing, standard of living increasing," he said.
"It's a country where we can be the leading retailer there without any trouble, and we're heading in that direction."
Harvey Norman shares dropped 6.3 per cent to $4.58 at the close of trading.
