Shares in ASX large cap Wesfarmers (ASX: WES) posted solid gains during the month of June, with the Wesfarmers share price hitting highs of almost $45 and closing the month at $44.83 per share. This represents a 11% increase across the month, and a 45% jump on its lows of $31 in March.
Since the end of June, the Wesfarmers share price has continued to run higher, sitting at $46.33 at the time of writing. The conglomerate's shares are up 10.71% for the year to date, which is an impressive gain compared to the 10.58% drop in the S&P/ASX 200 Index (ASX: XJO) during the same period.
What moved the Wesfarmers share price in June?
In my opinion, the Wesfarmers share price performance this year is impressive, considering its exposure as a diversified retailer. For comparison, other large cap discretionary shares such as Aristocrat Leisure Limited (ASX: ALL) and Crown Resorts Ltd (ASX: CWN) have fallen 25% and 24%, respectively, year to date.
In June, a solid helped charge the conglomerate's impressive run. The company released a strong retail trading update that revealed sales were up over all its stores except Target, which saw sales drop by 1.8%. Kmart also posted disappointing growth, with its sales growth slowing to 4.1%.
The standout performer for Wesfarmers was easily online retailer Catch, which saw online sales rise by a massive 68.7% in the half-year to date. This compares to only 21.4% in the first half of Fy20.
In the update, Wesfarmers managing director Rob Scott noted that "it was pleasing to see a gradual reopening of the economy alongside the continuation of appropriate measures with respect to COVID-19." The recent coronavirus developments resulting in parts of Victoria re-entering lockdown may dampen some of this sentiment from Mr Scott, however.
DIY driving share price higher
The June update also revealed that Bunnings saw huge increases of 19.2% in sales growth for the second half of FY20, compared to only 5.8% growth during the first half. For FY20 year-to-date, sales also rose strongly for Bunnings, with the hardware superstore seeing an 11.3% increase compared to the prior corresponding period.
The performance of Officeworks was also very strong. Sales were up by 27.8% for the second half of FY20 to date, compared to only 11.5% in the first half. Officeworks' FY20 sales to date were also strong, up by 19.3%.
As a result of coronavirus, Australians have been forced to stay at home and this has led to increased spending on goods to assist with working and learning. This has undoubtedly have been a factor in Officeworks' strong growth.
Now what
In the calendar year to date, the group's retail businesses delivered total online sales growth of 89%, excluding its online retailer Catch, evidence that Wesfarmers' substantial investments in its e-commerce capabilities in recent years is clearly paying off.
When including Catch, on a financial year to date basis, total online sales across the group increased by 60% to $1.4 billion or $1.9 billion.
The Wesfarmers share price sits at $46.33 at the time of writing, with a $52.5 billion market capitalisation.
