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Wesfarmers warns of more Covid disruption after first-half profit dives

(Source: Bigstock)

Retail conglomerate Wesfarmers has reported a 12.7-per-cent decline in first-half net profit, estimated at $1.213 billion with revenue of $17.758 billion. 

The retail wing of the group comprises Bunnings, Officeworks, and Kmart Group, which includes Kmart, Target and Catch.

Sales momentum increased at the end of the half as lockdown and store closures reduced although, across the group, the business lost around 34,000 store trading days. Online sales during the half grew by 37.5 per cent to an estimated $1.9 billion, including Catch.

Bunnings’ revenue grew 1.7 per cent to $9.209 billion with sales quickly picking up in the second quarter during the Christmas trading period.

Kmart Group reported a 10-per-cent decrease in sales revenue to $4.602 billion.

Officeworks reported strong sales growth in technology and furniture products although this was offset by a decline in sales of office supplies and print-and-create services. Overall sales rose 3.7 per cent and were estimated at $1.580 billion. 

The group’s partnership with Flybuys in December last year, allows Bunnings and Officeworks customers to earn points adding another $120 million worth of transactions each month.

The company says global supply-chain disruptions will lead to costs increases for many products as well as impact availability in some categories.  

The company is investing in its future growth projects including the acquisition of Australian Pharmaceutical Industries, expansion of the Tool Kit Depot chain in Western Australia and the development of Bunnings’ commercial offer with the completion of the Beaumont Tiles acquisition. 

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