The owner of some of Australia’s best-known chain stores has reported a double-digit profit jump after successfully navigating a cost of living crisis and rising costs.
Wesfarmers on Thursday posted a bottom-line net profit of $2.9 billion for the 12 months to June 30, up 14.4 per cent on the prior year.
Revenue rose 3.4 per cent to $45.7 billion, while earnings before interest and tax grew 11.9 per cent to $4.47 billion.
Wesfarmers owns Kmart, Target, Bunnings and Officeworks and has interests in chemical, fertiliser and safety products.
“Wesfarmers’ earnings growth in challenging trading conditions is a credit to our team members, who continued to find ways to support customers and create shareholder value,” managing director Rob Scott said.
Earnings for Kmart Group, which includes Target, grew 9.2 per cent to $1 billion, while Bunnings’ earnings rose 3.8 per cent to $2.3 billion. Officeworks’ earnings climbed 1.9 per cent to $212 million.
EToro market analyst Farhan Badami said Wesfarmers had delivered a strong set of numbers and that the results showed off its pricing power and supply chain strength.
“It has a unique competitive advantage of offering low prices that allow it to expand margins even as consumers hunt for value,” Mr Badami said.
“At nearly 40x forward earnings, Wesfarmers is priced for perfection following a 28 per cent rally this year, but these results show it has earned that premium.”
Wesfarmers plans to upgrade more of its Kmart stores to a new “Plan C+” format, with improved design and layout and a full store refresh, after seeing improved trading in the five that have already been transformed.
Wesfarmers will pay a final dividend of $1.11 per share, for a total dividend for 2024/25 of $2.06 per share, an increase of four per cent.
In early Thursday trading, Wesfarmers shares were 0.1 per cent higher at $91.78.
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