Key Highlights

  • The new financial year began reasonably, with WesCEF and lithium offsetting softer retail demand, particularly at Bunnings.
  • FY26 net profit after tax was $2.9 billion.
  • Fully franked Ordinary Dividends for FY26 totalled $2.22 per share.
  • Ken MacKenzie took over as Chairman from Michael Chaney.

Wesfarmers Limited (ASX:WES) is among the ASX share prices investors are reassessing this week after the conglomerate used its 2026 Annual General Meeting in Perth on Thursday 29 October 2026 to describe a "reasonable start" to the 2027 financial year. The owner of Bunnings, Kmart, Officeworks and Priceline said performance in its chemicals, energy and fertilisers division was offsetting softer retail demand, while shareholders approved a change of chair. Held five days before the Reserve Bank's latest rate increase, the meeting offered a snapshot of how one of Australia's largest retailers sees household spending.

What Wesfarmers Said About Trading Since 1 July

In the Managing Director's address, Rob Scott outlined trading across each division. At Bunnings, year-to-date sales growth has moderated, with seasonal and commercial categories weighing on results in recent weeks. Kmart Group sales growth is broadly in line with the second half of the 2026 financial year. Officeworks sales growth is also broadly in line with the second half, and the company expects Officeworks Earnings to improve this year as its transformation program, due for completion by the end of 2027, progresses.

In Health, the company said Priceline network sales are growing at a healthy pace, the relaunched Pulse Rewards loyalty program has been well received, and wholesale automation continues, with Adelaide now live and Perth due to open next year.

The clear bright spot was Wesfarmers Chemicals, Energy and Fertilisers (WesCEF). Wesfarmers said first-half earnings in this division should benefit from lagged ammonia pass-through pricing, recent capacity expansions and improved spodumene pricing.

Lithium Becomes a Larger Part of the Story

The Mt Holland lithium operation, a joint venture within WesCEF, is now contributing to earnings. Wesfarmers said Mt Holland delivered its first profit in 2026, and production this financial year is expected to be about 380,000 tonnes, with WesCEF's share at 190,000 tonnes. An expansion announced in July is expected to double concentrate output and lower unit costs by 2030.

For investors, this changes the mix of drivers. Wesfarmers has long been viewed mainly through the lens of retail spending, but lithium pricing and the ramp-up at Mt Holland now add a Commodity element to the earnings picture, alongside ammonia and fertiliser markets.

FY26 Results Recap and Dividends

The AGM addresses also recapped the year to 30 June 2026. Net profit after tax was $2.9 billion, which the company said was an increase of 8.3 per cent on the previous year, excluding significant items in the prior period. Profits rose in Bunnings, Kmart Group, WesCEF, Industrial and Safety on an underlying basis, and Health. Officeworks earnings fell, mainly because of restructuring.

Fully franked ordinary dividends for the 2026 financial year totalled $2.22 per share. Dividends are one of the factors income-focused investors weigh up when assessing the company, and the payout depends on cash generation across the divisions.

Interest Rates and the Consumer Backdrop

Scott told shareholders that the Reserve Bank had increased the cash rate for the fourth time this year, and that elevated Inflation and interest rates were pressuring household and Business budgets. Since the meeting, the Reserve Bank has gone further. On Tuesday 3 November 2026, it raised the cash rate target by 25 basis points to 4.85 per cent, its fifth increase this year, on a vote of six to three.

The Reserve Bank board said inflation "remains elevated" and that "The economy is slowing, housing prices have fallen significantly and the Unemployment rate has risen." Westpac, CBA, ANZ and NAB then announced 0.25 percentage point rises in variable home Loan rates, effective 13 November 2026.

Higher Mortgage repayments tend to weigh most on discretionary categories, which is relevant to Bunnings' seasonal and commercial ranges and to Kmart's general merchandise. At the same time, Kmart's low-price positioning has historically attracted customers looking to stretch their budgets. Australian Bureau of Statistics data released on 4 November 2026 showed household spending rose 0.6 per cent in September, led by transport and health.

The Chairman also used his address to describe wider economic headwinds, including low growth, low productivity and low confidence, and called for tax reform at federal and state levels.

Board Changes, Votes and Technology

Shareholders elected Ken MacKenzie as a director with 98.66 per cent of votes in favour, allowing him to succeed Michael Chaney as Chairman at the close of the meeting. Chaney retired after 11 years as Chairman, having earlier served 13 years as Managing Director. Bill English and Alan Cransberg were re-elected with 96.25 per cent and 97.01 per cent support. The remuneration report received 97.62 per cent support, and the grant of KEEPP deferred and performance shares to Scott was approved with 98.50 per cent in favour.

On technology, Scott described a "People-first, Digitally-enabled" approach to artificial intelligence, framing it as a way to address low productivity. He said AI shopping assistants used across the group, named Buddy, Joy and Ollie, were associated with two to three times higher conversion and 20 to 30 per cent higher average order values.

Items on the Watchlist

Several operational milestones are close. The Kmart Group Moorebank omnichannel Facility is due for practical completion in November 2026, and Wesfarmers expects operating expenses of $30 million to $40 million in the 2027 financial year relating to site preparation. Investors are likely to watch whether Bunnings sales momentum recovers as the warmer months progress, how Mt Holland output tracks against the 380,000 tonne expectation, and whether lithium and ammonia pricing hold up. Scott said the group is "well positioned to deliver through the cycle", citing its diversified portfolio and balance sheet.

Key Takeaways

Wesfarmers told its 2026 AGM that the new financial year had begun reasonably, with WesCEF and lithium helping to offset softer retail demand, particularly at Bunnings. FY26 net profit after tax was $2.9 billion and fully franked ordinary dividends totalled $2.22 a share. Ken MacKenzie has taken over as Chairman from Michael Chaney. With the Reserve Bank lifting the cash rate to 4.85 per cent on 3 November and banks passing on the rise, household spending, lithium pricing and the Kmart Moorebank start-up are among the key drivers behind the Wesfarmers share price in the months ahead.