Highlights

  • Wesfarmers reported FY2026 Revenue of A$47.27 billion, increasing 3.4%, while NPAT excluding significant items rose 8.3% to A$2.87 billion.
  • Bunnings generated revenue of A$20.33 billion, while Kmart Group Earnings before tax increased 6.0% to A$1.11 billion.
  • WesCEF earnings increased 18.5% to A$473 million, supported by a positive contribution from its lithium operations.
  • The company declared a fully franked ordinary Dividend of A$2.22 per share for FY2026, increasing 7.8%.

Wesfarmers Limited (ASX:WES) is an Australian diversified conglomerate operating across home improvement, general merchandise, office supplies, healthcare, chemicals, fertilisers and lithium production. Its businesses include Bunnings, Kmart, Target, Officeworks and Priceline-related operations. The company's FY2026 financial performance reflected growth across its major retail divisions, increased contributions from lithium operations and continued Investment in operational efficiency and development projects.

FY2026 Financial Results Reflect Higher Underlying Earnings

Wesfarmers reported revenue of A$47.27 billion for the financial year ended 30 June 2026, compared with A$45.70 billion in FY2025.

EBIT excluding significant items increased 7.3% to A$4.49 billion.

Net profit after tax excluding significant items increased 8.3% to A$2.87 billion, compared with A$2.65 billion in FY2025.

However, statutory NPAT declined 1.8% from A$2.93 billion in FY2025.

The difference reflected significant gains recognised in FY2025 that did not recur during FY2026.

Basic earnings per share reached 253.4 cents, representing underlying growth of 8.3%.

Return on equity excluding significant items increased to 35.5% from 31.2%.

Bunnings Supports Retail Earnings

Bunnings Group generated revenue of A$20.33 billion during FY2026, increasing 3.9%.

Comparable store sales increased 3.7%, supported by Demand across consumer and commercial customers.

Divisional earnings before tax reached A$2.46 billion, increasing 5.1%.

Productivity initiatives, network investment and changes in merchandise ranges contributed to its operating performance.

Bunnings also expanded digital services and its retail media operations.

From 1 July 2026, Wesfarmers transferred Blackwoods and Workwear Group into Bunnings, expanding its exposure to industrial and commercial customers.

Kmart Group Records Higher Earnings

Kmart Group reported sales of A$11.66 billion, representing growth of 2.8%.

Comparable sales increased 2.7%, reflecting customer demand for general merchandise and value-focused products.

Earnings before tax increased 6.0% to A$1.11 billion.

Productivity improvements across sourcing, Supply chains and store operations contributed to earnings growth.

Kmart continued rolling out its Plan C+ store format and investing in digital services.

However, additional fulfilment infrastructure and store development expenditure may affect operating costs during FY2027.

Lithium Operations Contribute to WesCEF Earnings

Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) reported earnings before tax of A$473 million, increasing 18.5% from FY2025.

Lithium operations contributed A$40 million, compared with a A$59 million loss in the previous year.

Excluding lithium, WesCEF earnings declined 5.5% to A$433 million, partly reflecting lower ammonia earnings.

Wesfarmers holds a 50% interest in Covalent Lithium, which operates the Mt Holland mine and concentrator alongside the Kwinana lithium hydroxide refinery.

The venture achieved initial lithium hydroxide production and sales during FY2026.

However, intermittent odour issues affected refinery commissioning and production ramp-up.

Management expects production to increase during the second half of FY2027, subject to successful mitigation and operational performance.

Wesfarmers also approved the Mt Holland expansion, targeting approximately 760,000 tonnes of annual spodumene concentrate capacity, with initial production planned for calendar 2030.

Health Grows While Officeworks Faces Restructuring Costs

Wesfarmers Health reported revenue of A$6.47 billion, increasing 9.1%.

Divisional earnings before tax increased 18.8% to A$76 million.

Priceline Pharmacy headline network sales increased 12.7%, supported by retail activity and operational improvements.

In contrast, Officeworks reported sales growth of 3.7% to A$3.68 billion, while earnings before tax declined 22.2% to A$165 million.

The reduction reflected expenditure associated with restructuring, technology investment and its operational transformation programme.

Management expects these initiatives to contribute to future efficiency improvements, although implementation expenses remain relevant.

Cash Flow, Debt and Shareholder Distributions

Wesfarmers reported operating Cash Flow of A$4.27 billion, declining 6.5% from FY2025.

Free cash flow increased 15.8% to A$3.99 billion, supported partly by asset sale proceeds.

Net financial debt increased to A$5.30 billion from A$4.23 billion.

The debt-to-EBITDA ratio increased to 1.9 times from 1.7 times.

The company declared a fully franked final ordinary dividend of A$1.20 per share, taking FY2026 Ordinary Dividends to A$2.22 per share.

A separate A$1.50 per Share Capital management distribution was paid in December 2025.

FY2027 Outlook and Key Risks

Wesfarmers expects continued investment across its retail operations and lithium developments.

Management forecasts FY2027 net Capital Expenditure of approximately A$1.3 billion to A$1.5 billion.

The company anticipates continued cost pressures from labour, energy, financing and supply chains.

Performance will depend on household spending, residential construction activity, operational productivity and lithium market conditions.

Consumer demand: Changes in household spending may influence Bunnings, Kmart and Officeworks sales.

Lithium execution: Kwinana refinery ramp-up, product qualification and lithium prices remain important variables.

Restructuring expenditure: Officeworks transformation and additional retail investment may affect near-term earnings.

Funding costs: Higher debt and borrowing expenses could influence profitability and capital allocation.

Key Insights

Wesfarmers' FY2026 results reflected higher underlying earnings, supported by Bunnings, Kmart Group and the improvement in lithium operations.

However, performance differed across businesses, with Officeworks facing restructuring costs and underlying chemicals earnings declining when lithium contributions were excluded.

Future results will depend on retail demand, operational efficiency, capital expenditure and the commercial performance of the lithium business.