By Anhar Khanbhai

Harvey Norman has warned the market to expect a poor first-half result after reporting a fall of almost 20% in pre-tax earnings for the first quarter, owing to price deflation and stiff online competition.

The company took the unusual step of releasing early profit numbers yesterday while reporting its quarterly sales numbers and pointing to a tough Christmas trading period.

Gerry Harvey yesterday said he expected the RBA to cut interest rates today to revive the flagging retail sector.

The electrical and homeware retailer announced a 19.3% fall in profit before tax and minority interests to $62.8 million for the September quarter.

“Today was a bad day. The country needs some good news and kick-along because there is so much negativity,” Harvey said.

Global sales from franchised outlets were $1.48 billion for the three months to the end of September, down 3.8% from the same period a year earlier, excluding new store openings, and following a 3.6% decline in comparable-store sales for the past financial year.

“If we get a rate cut things might improve before Christmas, but I still don't think it's going to be a very good Christmas,” Harvey said speaking to The Australian.

“If we look at unit sales they're up, but in dollar terms things are just so bad. Buying a TV is like buying a pack of Weet-Bix, they’re that cheap.”

New store openings were helping to boost overall sales, but comparable-store sales were still in reverse.

“The store we’ve just opened in Zagreb has taken off like a rocket, Singapore’s OK and Malaysia is better. The store we've just opened in Springvale in Melbourne has started very well,” Harvey said.

“But if you look at our other stores there’s not a lot to be proud of.”

Harvey Norman has closed four Clive Peters and three Rick Hart stores during the quarter, a little more than a year after buying them out of administration.