Kmart’s record earnings lift Wesfarmers’ profits

Retail conglomerate Wesfarmers has seen its profits rise in the December half, thanks to shoppers flocking to its Kmart discount department store in the cost-of-living crunch.

The company, which also owns Officeworks and Bunnings, said its net profit rose 3 per cent to $1.4 billion in the six months to December 31, the first half of its financial year. Overall revenue ticked up 0.5 per cent to $22.7 billion, lifted by Kmart’s 4.8 per cent revenue lift to nearly $6 billion, while sales at website and its chemicals and fertiliser division disappointed.

Kmart has posted record earnings, driving Wesfarmers’ overall half-year results.
Kmart has posted record earnings, driving Wesfarmers’ overall half-year results.Credit: iStock

Kmart’s earnings jumped 26.5 per cent to a record high of $601 million, with clothing and its private-label brand Anko driving much of the sales.

“Wesfarmers’ retail divisions executed strongly during the half, responding effectively to changing customer needs as households increasingly sought out value,” said Wesfarmers chief executive Rob Scott. “In this environment, the retail divisions’ core offer of everyday products with market-leading value credentials supported growth in sales and customer transaction numbers.”

Moderation in some costs such as international freight fees and improvements in cost efficiencies also boosted the figures, the company said in a statement to the ASX.

Wesfarmer’s office supplies store Officeworks and home improvement chain Bunnings posted more modest gains, with revenue growth of 1.8 per cent and 1.7 per cent, respectively. was the most significant drag on the business, with revenue slumping nearly 38 per cent. WesCEF, the ASX giant’s chemicals, energy and fertiliser business, saw its sales fall by 21 per cent.

The company will pay a fully franked interim dividend of 91 cents per share, representing a 3.4 per cent uptick on the same time last year.

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