Key Highlights

  • Group Revenue was $47,274 million, up 3.4%, and EBIT was $4,493 million.
  • Net profit after tax was $2,874 million, down 1.8% reported, or up 8.3% excluding FY25 significant items.
  • Ordinary dividends totalled $2.22 per share, fully franked, plus a $1.50 per Share Capital management distribution paid in December 2025.
  • WesCEF earned $473 million, up from $399 million, and FY27 Capital Expenditure is expected at $1.3 billion to $1.5 billion.

What does Wesfarmers' (ASX:WES) latest result say about a conglomerate that is lifting its dividend while committing hundreds of millions of dollars to a lithium expansion? Based on the FY26 report released on 27 August 2026, it points to a retail core that kept growing, a chemicals and lithium arm returning to higher earnings, and a Balance Sheet carrying more Debt than a year earlier. All figures below are Australian dollars for the year ended 30 June 2026 (FY26) unless stated.

The reported numbers

Group revenue was $47,274 million, up 3.4% from $45,700 million in FY25. Earnings before interest and tax (EBIT) were $4,493 million. Excluding significant items, which in FY25 included a $233 million pre-tax gain on the Coregas sale, EBIT rose 7.3% from $4,186 million.

Net profit after tax was $2,874 million, down 1.8% on a reported basis from $2,926 million. Excluding FY25 significant items, it was up 8.3% from $2,653 million. Basic Earnings Per Share were 253.4 cents, and Return on Equity (rolling twelve months, excluding significant items) was 35.5%, against 31.2%.

Ordinary dividends totalled $2.22 per share, fully franked, up from $2.06. That comprised a $1.02 interim and a $1.20 final, with the final due to be paid on 7 October 2026. Separately, a $1.50 per share capital management distribution was paid in December 2025, made up of a $1.10 capital return and a $0.40 special dividend.

What Wesfarmers does and where profit comes from

Wesfarmers owns Bunnings, Kmart Group, Officeworks, Wesfarmers Health, the chemicals, energy and fertilisers Business (WesCEF) and Industrial and Safety. Bunnings is the largest earner. It recorded revenue of $20,399 million and earnings before tax of $2,455 million, up 5.1%, with store-on-store sales growth of 3.7%.

Kmart Group reported earnings before tax of $1,109 million on revenue of $11,751 million. Officeworks earned $165 million, down from $212 million, which the company attributed mainly to one-off transformation costs. Wesfarmers Health earned $76 million on revenue of $6,474 million, a low return on capital of 4.2% that the company is trying to lift through a transformation program.

Blackwoods and Workwear Group moved into Bunnings Group from 1 July 2026, so the segment reporting will look different from FY27.

Lithium: from ramp-up to expansion

WesCEF earned $473 million, up from $399 million, helped by improved production at Mt Holland and higher lithium prices. Ammonia price timing linked to the Middle East conflict weighed on the result. Wesfarmers holds its interest in Mt Holland through Covalent Lithium, a joint venture with Chile's SQM.

Spodumene concentrate output was 209 kilotonnes for the year, which the company described as above guidance and nameplate capacity. The Kwinana refinery produced and sold its first lithium hydroxide, but ramp-up has been affected by intermittent odour issues. Management expects refinery production rates to accelerate through the second half of FY27 as further mitigation is implemented.

On 22 July 2026 the joint venture approved a final Investment decision to roughly double nameplate concentrate capacity from about 380,000 tonnes a year to 760,000 tonnes (100% basis). Wesfarmers' share of capital expenditure is estimated at $645 million to $715 million, excluding capitalised interest and life-of-mine spending. Construction of a second concentrator is due to begin in the second half of calendar 2027, with first expansion production expected in the first half of 2030. The announcement did not state a lithium price assumption.

Balance sheet and cash

Operating cash flow was $4,272 million, down 6.5%, partly reflecting Working Capital investment in WesCEF and Health. Free cash flow rose 15.8% to $3,992 million, helped by $415 million of property proceeds, including the sale and leaseback of seven properties.

Net debt was reported at $5,271 million in the highlights table and $5,295 million in the operating review, which use different definitions; the prior-year figures were $4,326 million and $4,231 million respectively. Net debt to equity was 66.1%, against 47.1%, and debt to EBITDA was 1.9 times, against 1.7 times. Part of the shift reflects the December 2025 capital return and special dividend. Moody's rates the company A3 and S&P A-, both stable, and S&P raised its downside threshold in July 2026 to 3.0 times from 2.75 times.

The company expects FY27 capital expenditure of $1.3 billion to $1.5 billion, directed mainly to lithium, store refurbishments, Supply chains and a modular residential construction joint venture with Built Group.

Our interpretation of the numbers

The following is our own arithmetic, not company data. Adding the capital return and Special Dividend ($1.50) to Ordinary Dividends ($2.22) gives $3.72 per share of cash and capital distributions across FY26, well above the $2.22 headline ordinary figure. The $2.22 ordinary dividend equals roughly 88% of basic earnings per share of 253.4 cents.

Shareholder returns appear to be funded partly by higher gearing, so debt metrics deserve attention alongside earnings growth.

Risks and what to monitor

The company lists geopolitical disruption, Commodity and currency movements, competition and digital disruption, cyber security and regulatory change among its risks, together with clinical governance in Health and Franchisee compliance.

Items to watch include lithium refinery ramp-up and the odour mitigation work, the delivery of the Mt Holland expansion on budget and on time, Officeworks' cost transformation, the housing cycle's effect on Bunnings, and whether debt metrics remain within the ratings agencies' thresholds. The company has also announced the proposed sale of Cm3 to Achilles Group, which is subject to Foreign Investment Review Board approval.