Key Highlights

  • Revenue rose 3.4% to A$47,274 million for FY26.
  • The fully franked ordinary Dividend rose 7.8% to 222 cents per share.
  • Free Cash Flow rose 15.8% to A$3,992 million, and Return on Equity was 35.5%.
  • A trading update at the AGM said Bunnings sales had moderated in recent weeks.

The likely explanation is the trading update delivered at the AGM on 29 October 2026, in which management said sales at Bunnings had moderated in recent weeks against a backdrop of cost-of-living pressure and a recent Interest Rate rise. The company (ASX:WES) operates in this market.

The FY26 result

Wesfarmers reported its FY26 results on 27 August 2026. Revenue rose 3.4% to A$47,274 million. Statutory net profit after tax was A$2,874 million, down 1.8% because of significant items, but up 8.3% when those items were excluded. Earnings before interest and tax rose 7.3% excluding significant items. The full-year fully franked ordinary dividend rose 7.8% to 222 cents per share, free cash flow rose 15.8% to A$3,992 million and return on equity was 35.5%.

By division, Bunnings earnings rose 5.1%, Kmart Group earnings rose 6.0%, and Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) rose 18.5%, with its lithium Business returning to profit while ammonia pricing was lower. Officeworks earnings fell 22.2% on one-off transformation costs, though its sales grew 3.7%. From 1 July 2026, Blackwoods and Workwear Group moved into the Bunnings Group.

What the AGM update said

At the AGM, held in Perth on 29 October 2026, chief executive Rob Scott linked weaker trading to inflation, cost-of-living pressure and a recent rate rise, with another possible in November. He said Bunnings sales had moderated in recent weeks, noted that some shoppers may be waiting for Black Friday discounts, and cautioned against reading too much into a few weeks of trading.

The update contrasted with the FY26 result day, when management said early FY27 Bunnings sales growth was slightly ahead of the second half of FY26 and that Kmart and Officeworks were maintaining positive momentum.

How Wesfarmers makes money

Wesfarmers is a conglomerate. Its retail brands, Bunnings, Kmart, Officeworks and its health assets, generate most revenue through everyday-need consumer and trade spending. Its industrial businesses, WesCEF, include chemicals and fertilisers, industrial gases, and a lithium operation: a stake in the Mt Holland mine in Western Australia and the Kwinana lithium hydroxide refinery. Because the group spans retail, chemicals and health, results depend on consumer and on global Commodity prices at the same time.

Bunnings is the largest earnings contributor and the most important to watch. Its position rests on a broad range, scale pricing and an encouraging trade customer base. In FY27 the group plans Capital Expenditure of A$1.3 billion to A$1.5 billion, including lithium, store refurbishments, Supply chains and a new modular residential construction joint venture.

Lithium and chemicals

Chief executive Rob Scott said the chemicals, energy and fertilisers division is expected to have an encouraging first half, helped by higher ammonia prices and better spodumene prices from the Mt Holland mine, a joint venture with Covalent. The Kwinana refinery is still ramping up after odour-related delays, and Scott said the plant is performing very well operationally. Lithium prices are volatile, so this segment adds earnings diversity but also variability.

Acquisitions and leadership

Scott said the business development team is looking more closely at possible acquisitions of companies under financial strain, but will be "very cautious and very disciplined". Ken MacKenzie succeeded Michael Chaney as chair at the end of the AGM.

Sector and competitive position

Wesfarmers competes with Woolworths Group and Coles in some categories, with Amazon and other online retailers, Harvey Norman and JB Hi-Fi in homewares and electronics, and with Metcash-supplied independents in hardware.

Risks to monitor

Consumer demand. Management points to inflation, cost-of-living pressure and possible further rate rises, and Bunnings sales have moderated.

Cost pressures.

Lithium and ammonia prices. WesCEF earnings are sensitive to commodity cycles and to the Kwinana ramp-up.

Officeworks transformation. Earnings fell 22.2% on one-off costs, and benefits depend on execution.

Capital allocation. Acquisitions and A$1.3 billion to A$1.5 billion of capex carry execution risk.

Governance transition. A new chair took over at the AGM.

What to watch

The December-quarter trading commentary, any further RBA decisions, Black Friday and Christmas trading, the Kwinana ramp-up and the half-year result expected in February 2027 will provide the next evidence on whether the softness is temporary.