Wesfarmers Profits Up 16.6%, Bunnings Tops $1 Billion
Retail giant Wesfarmers, which owns Target, Kmart, Officeworks and Bunnings, posted an impressive revenue increase of 16.6 per cent to $17.7 billion.
Net profit for the group rose by 25.5 per cent to $1.4 billion, with hardware store Bunnings the best performing division as pandemic-driven home DIY sales soared.
Bunnings topped $1 billion in before tax earnings for the half, up 35.8 per cent to a whopping $1.27 billion.
Overall revenue for Bunnings increased by 24.4 per cent to $9.054 million.
Sales across Wesfarmer’s previously struggling Target division saw a modest recovery, with 13 per cent growth.
Sales for the Kmart Group, which includes Target and Kmart, jumped by 42 per cent to $487 million.
“[Target is] now expected to be profitable for the full financial year before one-off costs,” the company said in its earnings posting.
Wesfarmers reported $34 million in one-off costs related to the restructuring of Target, which will see it either shutter or convert 167 stores to the Kmart chain in Australia.
Wesfarmers managing director Rob Scott said the results were a positive indicator of continued profitable growth for the business.
“Good progress to accelerate the growth of Kmart and address the performance in Target continued during the half and, on a combined basis, Kmart and Target delivered a record earnings result for the period,” he said.
“Sales and transaction volume uplifts from Target stores that have been converted to Kmart stores continue to be very encouraging, and 19 stores were converted during the half. Target’s profitability improved significantly, supported by strong demand and the ongoing simplification of the business.”
Total online sales for the group, including Catch which was acquired by Wesfarmers in 2019, topped $2 billion.
Wesfarmers declared an 88 cent dividend, up by 17 per cent.