Wesfarmers-owned Kmart has delivered a solid half-year result, lifting earnings 6.1% to $683 million as the discount retailer doubled down on low prices, digitisation and the expansion of its Anko brand.

Revenue rose 3.3% to $6.3 billion in the six months to December 31, with comparable sales up 2.8%.

Earnings before interest and tax increased 7% to $733 million, while return on capital strengthened to 69.8%.

The result reflects what the retailer described as strong value credentials in a competitive market, with its Anko private-label ranges – particularly in the ‘one-up’ and ‘two-up’ price tiers – driving customer growth across home and general merchandise categories.

Kmart said its commitment to everyday low prices resonated during heavy promotional periods including Black Friday and Christmas, amid cost-of-living pressures and intense discounting.

The company added that productivity gains from digitising store operations, sourcing and supply chain processes helped offset rising operating costs and supported continued investment in long-term transformation projects.

Kmart expanded its use of RFID technology across stores and progressed construction of a Next Gen omnichannel facility in NSW, alongside commissioning two new fulfilment centres and rolling out a new online order management system.

Digital engagement also strengthened, with monthly active app users climbing to more than 1.6 million. Digital sales accounted for 10.3% of total sales, up from 9.7% a year earlier.

Kmart also moved to broaden its addressable market, launching a third-party online marketplace that has delivered early positive trading results.

Internationally, Anko-branded joint venture stores in the Philippines reported encouraging customer response, supporting three new openings during the half.

Seven Kmart stores have been upgraded to the new digitally enabled Plan C+ format, with 13 more to follow in the second half.