Wesfarmers Limited (ASX:WES) shares dipped 1.42% to $82.09 on 27 August, even as the conglomerate reported Underlying Profit growth driven by Bunnings and Kmart in its FY26 results.

FY26 Result Snapshot

  • Statutory NPAT: $2,874 million, down 1.8%
  • NPAT excluding significant items: $2,874 million, up 8.3%
  • Group revenue: $47,274 million, up 3.4%
  • EBIT (ex. significant items): $4,493 million, up 7.3%
  • Operating cash flow: $4,272 million, down 6.5%
  • Full-year dividend: $2.22 per share, up 7.8%

Why the Stock Slipped

  • Statutory NPAT fell 1.8% year-on-year, reflecting significant items in the prior period
  • Operating cash flow declined 6.5% due to deliberate Working Capital Investment in WesCEF and Health
  • WesCEF Earnings were hit by Middle East conflict-linked ammonia price timing and lithium refinery odour issues

What's Working Well

  • Bunnings and Kmart Group both delivered sales and earnings growth on everyday-low-price strategies
  • Spodumene concentrate production of 209 kilotonnes exceeded both guidance and nameplate capacity
  • Wesfarmers Health grew earnings as its transformation gained momentum
  • $1.50 per Share Capital management distribution paid during the year ($1,703 million total)

FY27 Outlook

  • Net capex guidance of $1,300–1,500 million, including ~$200 million for the Mt Holland mine and concentrator expansion
  • Mt Holland spodumene production expected to reach nameplate capacity of ~380 kilotonnes
  • Early FY27 trading: Bunnings sales growth slightly stronger than 2H FY26; Kmart in line; Officeworks positive but slightly lower
  • Higher borrowing costs expected due to increased net Debt and capex