Home > Latest News > Kmart Suffers From Long Covid, Earnings Plummet 40%

Kmart Suffers From Long Covid, Earnings Plummet 40%

Kmart and Target suffered from mass store closures and supply chain congestion, with earnings down a massive 39.7 per cent for the 2022 financial year.

Kmart Group’s revenue decreased by 3.5 per cent to $9.6 billion for the year. Earnings of $418 million were significantly impacted by COVID restrictions during the first half of the year, which saw almost 25 per cent of store trading days lost due to government-mandated store closures.

On top of these store closure were costs associated with “commitments made to pay team members when no meaningful work was available during lockdowns, additional support to team members required to isolate, rising international freight costs and costs associated with elevated domestic stock holdings,” according to Wesfarmers.

“Kmart Group was the most materially impacted by trading restrictions in the first half,” said Wesfarmers Managing Director Rob Scott.

Kmart’s total sales actually increased 0.5 per cent for the year, although comparable sales decreased 1.0 per cent.

The second half of the year saw total sales increase by 6.6 per cent, reflecting a spike in foot traffic returning to stores, as well as the early benefits of a number of Target store conversions.

Target’s total sales decreased 15.8 per cent for the year, which Wesfarmers says largely reflects the closure or conversion of 69 Target stores and 87 Target Country stores across the 2021 and 2022 financial years.

Comparable sales for Target, however, increased 8.6 per cent for the year, with a11.6 per cent leap in the second half.

Wesfarmers appear content, saying “the performance of the Target store conversions, when adjusted to exclude the impact of lockdowns, has been in line with the original business case, delivering improved performance with higher profit contribution.”

There were 452 stores across Kmart and Target as at 30 June 2022.

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