The Wesfarmers Ltd (ASX: WES) share price is in focus today after the company posted a 9.3% jump in half-year NPAT to $1,603 million and lifted its interim dividend by 7.4%.
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What did Wesfarmers report?
- Revenue rose to $24,212 million, up 3.1% on the prior period
- Net profit after tax (NPAT) increased 9.3% to $1,603 million
- Earnings before interest and tax (EBIT) climbed 8.4% to $2,493 million
- Fully-franked interim dividend of $1.02 per share, up 7.4%
- Operating cash flows at $2,491 million, down 3.3% year on year
- Basic earnings per share rose to 141.4 cents
What else do investors need to know?
Wesfarmers highlighted strong earnings growth from its major divisions, led by Bunnings, Kmart Group, and WesCEF. Bunnings delivered higher sales across all categories and geographies, while Kmart Group benefited from strong demand for its Anko ranges, although softer trading in Target offset some gains.
The Covalent Lithium joint venture's refinery was completed below cost estimates and has begun producing high-quality lithium hydroxide. Meanwhile, Officeworks earnings were stable despite costs from its transformation program. Across the Group, a focus on productivity, cost control, and digital investments helped offset ongoing cost pressures.
Wesfarmers continues to enhance its digital and AI capabilities, recently striking new partnerships with Microsoft and Google Cloud to drive innovation and support growth across the business. The company remains committed to sustainability, reporting a 27.8% reduction in Scope 1 and 2 emissions.
What did Wesfarmers management say?
Managing Director Rob Scott said:
Wesfarmers' increase in profit was supported by strong earnings contributions from our largest divisions – Bunnings, Kmart Group and WesCEF.
During the half, Wesfarmers' divisions benefited from productivity initiatives to navigate ongoing challenging market conditions… The divisions performed well, driving productivity to mitigate cost pressures and keep prices low for customers.
What's next for Wesfarmers?
Looking forward, Wesfarmers expects its mix of leading businesses and strong balance sheet to support solid shareholder returns. Management notes that inflation and higher operating expenses remain headwinds, but the retail divisions are set to benefit from ongoing investment in digital, AI, and omnichannel assets.
Bunnings and Kmart Group are expected to deliver sustainable earnings growth through their focus on everyday low prices and productivity. The company's lithium operations are forecast to contribute positively in the second half, while the Officeworks transformation is intended to deliver efficiency and long-term improvement.
Wesfarmers share price snapshot
Over the past 12 months, Wesfarmers shares have rise 17%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has increased 7% over the same period.
