Harvey Norman has barely lifted first-half profit on weak sales at home, but the company's overseas ventures, which now account for a quarter of its business, have shone.

The multinational homewares and electronics retailer announced a 0.1 per cent increase in underlying profit after tax on Thursday as it continues to roll out its flagship store program. Reported profit after tax grew 7.5 per cent to $222.77 million. 

Total sales revenue for the six months to 31 December rose about 16 per cent to $1.18 billion, helped by what the company deemed its strongest-ever performance from its overseas company-operated stores.

Morningstar equity analyst Johannes Faul said the result was weaker than expected as sales from the company's Australian 545 franchisees had a 0.6 per cent decline in comparable sales, accelerating in January and February.

The company blamed the clumping of Australia Day, the start of the school year and the Lunar New Year in the same week for the drop-off at the start of the second half.

Faul notes Harvey Norman continues to haemorrhage market share to rival JB HiFi (ASX: JBH), which delivered comparable sales growth in its Australian business of 3 per cent.

Internationally, Faul says Harvey Norman reported strong performance, helped by its flagship store strategy: 25 per cent of its consolidated profit now comes from overseas, up from 3 per cent at its interim result a decade ago, with a new flagship outlet in Zagreb, Croatia, launching in October.

"The last six months have seen outstanding results from our stores in Singapore and Malaysia, building on the growth we'd already experienced in the region and really delivering in an impressive manner," chairman Gerry Harvey said.

The company now has flagship stores in eight countries including Singapore, Ireland, Slovenia and New Zealand.

Harvey Norman booked a $9.7 million loss on the restructure and consolidation of its partnership with educational equipment provider KEH, of which it took an increased stake in July.

The company's property portfolio remained robust, valued at $2.93 billion, and represents about 93 per cent of the total net asset base.

"Our property portfolio continues to be a major point of difference for us and is a real competitive advantage against emerging or restructured competitors - both big or small, online or physical," Harvey said.

"It keeps us a step-ahead and provides the flexible, large footprint needed to showcase the best on offer."

Ahead, the company said it will continue to invest in the flagship strategy. It expects to expand its Malaysia footprint to over 50 stories by the end of 2023 and is looking for new retail sites in Singapore and Croatia.

Faul notes Harvey Norman will now consider how to rolls its flagship strategy out in Australia. The company has one mega store here: the Auburn store in Sydney’s west, which opened last year.

"The company will now consider whether it rolls out new mega stores in capital cities or refurbish of its existing stores," he said.

Faul is heartened by the success of the company's flagship stores overseas but says it's too soon to predict how similar Australian stores could perform.

Harvey Norman has maintained its interim dividend of 12 cents per share, fully franked.

At 2.30pm Sydney time, the share price was up 2.1 per cent at $3.64.

Faul says the outlook for Harvey Norman is marred by sluggish wage growth, uncertainty surrounding the upcoming NSW state election and the federal election in May, and weakness in the housing market.