The Wesfarmers Ltd (ASX: WES) share price will be in the spotlight this week as the ASX 200 conglomerate gears up to hold its 2022 annual general meeting (AGM).
On Thursday, Wesfarmers will hold its 41st AGM at the Perth Convention and Exhibition Centre.
Shareholders will be able to participate in the AGM and ask questions either in person or online.
As usual, the formalities of the meeting will see shareholders vote on items such as the re-election of board members, the FY22 remuneration report, and the grant of performance shares to managing director Rob Scott.
But the real meat of the AGM will come through management's addresses at the start of the meeting.
Chair Michael Chaney will be up first to introduce the proceedings and provide some commentary.
Then, all eyes will be on Rob Scott's address, which is what the market will be paying particular attention to.
Here's what to watch for when Wesfarmers holds its AGM on Thursday.
Image source: Getty Images
Recent trading conditions
Unlike Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL), Wesfarmers doesn't usually provide quarterly updates.
So, Thursday's AGM is unlikely to get into the nitty gritty of Wesfarmers' recent financial performance in FY23.
However, the managing director's address usually pulls back the curtain and provides comments on recent trading.
This should include comments at a segment level, providing insight into performances across the likes of Bunnings, Officeworks, Kmart, Catch, chemicals, and industrials.
When Wesfarmers released its FY22 results, it noted that retail trading conditions had remained "robust" through the first seven weeks of FY23.
Singling out its retail brands, the conglomerate said that sales growth had been particularly strong in Kmart Group. Bunnings was also ticking along, notching up positive sales growth. However, sales at Officeworks were flat compared to the prior year.
Wesfarmers also noted that its industrial businesses remain subject to international commodity prices, foreign exchange, competitive factors, and seasonal outcomes.
Inflation and cost of living pressures
Inflation is the topic on everyone's lips at the moment. And as the nation's largest retail conglomerate, there'll be a lot of interest in what Wesfarmers has to say (or perhaps not say) on the matter.
Commenting on these conditions back in August, Wesfarmers said:
The Australian economy is starting from a strong base with low unemployment and high levels of household savings, but the effects of inflation and higher living costs are placing pressure on parts of the economy, including household budgets.
At the time, the conglomerate believed that it was well-placed to navigate through this environment, noting:
The Group's retail businesses are well positioned as cost of living pressures impact household budgets and value once again becomes increasingly important to customers. The retail businesses will maintain their focus on meeting the changing needs of customers and delivering even greater value, quality and convenience.
Wesfarmers share price snapshot
As I covered recently, brokers have a mixed view on Wesfarmers shares. Morgans and UBS are camped among the bulls while Goldman Sachs and Citi remain sceptical.
With Wesfarmers shares last closing at $44.18, they've slumped 26% in the year to date. This has largely been due to the conglomerate's vulnerability to the impacts of rising inflation and interest rates, which could see consumer spending dry up across its portfolio of retail brands.
Wesfarmers reported net profit after tax (NPAT) of $2.4 billion in FY22, marginally lower than the prior year. So, Wesfarmers shares are trading on a trailing price-to-earnings (P/E) ratio of 21 times.
As for dividends, an annual payout of $1.80 puts Wesfarmers shares on a trailing dividend yield of 4.1%. With the benefit of franking credits, this yield bumps up to 5.8%.
