Wesfarmers delivered higher sales and profit in the last fiscal year, as the value proposition at Bunnings and Kmart continued to resonate with consumers.
The group’s revenue rose 3.4 per cent to $47.2 billion during the year ended June 30, while net profit after tax (excluding the gain on sale and divestitures) grew 8.3 per cent to $2.7 billion.
Management said the group’s largest divisions, Bunnings and Kmart, continued to drive sales and earnings growth thanks to their everyday low prices.
Bunnings saw revenue increase 4.1 per cent to $20.4 billion, with growth observed across all product categories and regions, driven by investment in price for increasingly cost-conscious customers. The business also delivered a 5.1 per cent uplift in earnings.
Michael Schneider, MD of Bunnings Group, has announced his plan to retire next February after having led the business since 2016. Rachael McVitty, currently the group’s chief customer officer, has been appointed as Schneider’s successor.
At Kmart, sales rose 2.8 per cent to $11.7 billion, despite more challenging conditions for seasonal categories in the fourth quarter. Divisional profit grew 6 per cent.
“Disciplined execution of strategies helped offset cost pressures and delivered operating leverage across both businesses,” said Wesfarmers MD Rob Scott.
“Bunnings’ solid trading performance reflected the strength and resilience of its offer and ability to deliver growth through a range of market conditions.
“Kmart Group’s higher earnings were supported by the strong value credentials of its Anko products and focus on operating efficiency and cost control,” he added.
At Officeworks, revenue increased 3.7 per cent to $3.7 billion amid a more challenging economic and trading environment in the second half. Earnings fell 22.2 per cent, reflecting one-off costs associated with its transformation program, which commenced during the first half.
According to Scott, the program is expected to drive long-term earnings growth by transitioning the business to a low-cost operating model and improving the customer value proposition.
Looking ahead, Wesfarmers said its retail divisions are well positioned to grow profitably, despite inflation, house prices, interest rates and tax settings continuing to affect consumer sentiment
“The retail divisions will continue to develop their omnichannel capabilities to drive sales and earnings growth, including their agentic commerce solutions, faster and more reliable delivery and growing marketplaces,” the group said.
