Australian conglomerate Wesfarmers annual profit rises on retail strength

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FY NPAT up 3.7% at A$2.56 bln
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Declares final dividend of A$1.07/sh
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Bunnings’ sales growth moderated in first 8 weeks of FY25
(Adds CEO comment, details about results in paragraphs 2, 3, 6 & 7)
Aug 29 (Reuters) – Australian conglomerate Wesfarmers reported a nearly 4% rise in its annual profit on Thursday, boosted by strong sales in its retail divisions Bunnings and Kmart amid higher borrowing costs.
“We expected a challenging year and there were numerous headwinds to navigate with cost of living pressures, rising costs of doing business, subdued activity in residential construction and significant volatility in key commodities,” Managing Director Rob Scott said in a statement.
The retail division responded well by offering low-price products as households increasingly shifted towards value, he added.
The apparel-to-lithium conglomerate’s net profit after tax for the full year ended June 30 came in at A$2.56 billion ($1.74 billion), mainly in line with LSEG estimate of A$2.57 billion and higher than A$2.47 billion a year ago.
Bunnings and Kmart, which contributed roughly 80% of Wesfarmers’ total operating earnings, saw 2.3% and 4.4% growth in their annual revenue, respectively.
However, in the first eight weeks of fiscal 2025, sales growth in Bunnings, which is a retailer of home improvement and lifestyle products, moderated from the second half of fiscal 2024.
Wesfarmers expects market-wide softness in building activity to continue in fiscal 2025, but anticipates population growth and shortages in Australian housing stock to support a recovery over the medium term.
The company declared a final dividend of A$1.07 per share, higher than A$1.03 apiece last year. ($1 = 1.4741 Australian dollars) (Reporting by Himanshi Akhand and Archishma Iyer in Bengaluru; Editing by Tasim Zahid and Maju Samuel)