The Wesfarmers share price rocketed 32% in FY 2024! Here's how

Wesfarmers shares smashed the benchmark in FY 2024. But how?

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The Wesfarmers Ltd (ASX: WES) share price just completed a banner financial year.

Shares in the S&P/ASX 200 Index (ASX: XJO) retail stock – whose subsidiaries include global household names like Bunnings Warehouse, Kmart Australia, Officeworks and Priceline – closed out FY 2023 trading at $49.34.

On 28 June, the last trading day of FY 2024, shares finished the day changing hands for $65.18 apiece.

That put the Wesfarmers share price up a whopping 31.1% over the 12 months, as shown in the chart below. For some context, the ASX 200 gained 7.8% over this same period.

And that strong performance doesn't include the two fully franked dividends Wesfarmers paid out over the financial year. Wesfarmers shares currently trade on a trailing dividend yield of 2.9%.

Here's why ASX 200 investors sent the retail stock soaring in FY 2024.

Why did the Wesfarmers share price skyrocket in FY 2024?

The strong run higher for the Wesfarmers share price was driven by equally strong underlying performances from most of its core business segments.

The company reported its full-year results for FY 2023 on 25 August. These results are relevant to the past 12 months' performance as they were released well into FY 2024 and impacted the share price over the 2024 financial year.

Highlights of those results included an 18.2% year-on-year increase in revenue to $43.5 billion, while net profit after tax (NPAT) was up 4.8% to $2.5 billion. Also really drawing analyst interest was the 81.6% boost in the company's operating cash flow, which hit $4.2 billion.

With these strong metrics in the background, management boosted the full-year dividend by 6.1% to $1.03 a share.

"Wesfarmers' financial results were underpinned by strong divisional earnings growth of 12.9% for the year, as the group's operating businesses continued to respond well to trading and market conditions," managing director Rob Scott said on the day.

ASX 200 investors clearly took note. The Wesfarmers share price gained 8.6% over the three trading days in August following the results announcement.

And the company didn't disappoint with its half-year results either.

Wesfarmers reported its H1 FY 2024 results on 15 February, the most recent price-sensitive announcement out from the company.

Once more, investors were greeted with strong growth metrics, sending the ASX 200 retail stock up 5.0% on the day.

Highlights included a 0.5% year-on-year increase in half-year revenue to $22.7 billion and an NPAT up 3.0% to $1.4 billion.

Operating cash flows also continued to impress, increasing 47% from H1 FY 2023 to $2.9 billion.

This saw management lift the interim dividend by 3.4% to 91 cents a share.

And in a promising sign for the full FY 2024 results, management noted, "For the first five weeks of the second half of the 2024 financial year, Kmart Group has continued to deliver strong sales growth."

As for FY 2025, the Wesfarmers share price was trading at $66.10 at the close on Monday. That's up almost 1.5% in the nascent new financial year.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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