Wesfarmers has announced in a trading update that the Kmart Group, which includes Kmart, Target and the Catch online marketplace, will deliver earnings before tax of between $170 million and $180 million for the half-year ending December 2021, a huge plummet from the $487 profits earned in the same period in 2020.
The closure of 62 Target stores during the previous financial year, coupled with losses of $44 million at Catch.com.au, have hit the Group’s bottom line hard. Add to this continued inventory issues, and the hit to sales from lockdown that saw it loss close to a quarter of its trading days, and these figures are to be expected. Record high freight costs also added to the pain.
Total sales across the group fell 10.3 per cent during the final half of 2021.
“These issues are expected to persist while COVID-19 cases and the number of team members required to isolate remain elevated,” the company said.
Despite this, Wesfarmers will deliver a net profit of between $1.18 billion and $1.24 billion for the half-year, which sits within its expectations. These figures were boosted by strong performances by Bunnings, and Wesfarmers Chemicals, Energy & Fertilisers.
Wesfarmers shares are up 2.19 per cent today, as of 1pm.
